INCOME  TAX! 


Hon.  DAVID  B.  HILL’S 


GREAT  SPEECH  ON  THE 


ariff  Bill  and  Income  Tax. 


lelivered  in  the  United  States  Senate,  at  Washington,  I).  C., 
Monday,  April  Dth,  1894:. 

Copyright,  1894,  by  M.  J.  Ivers  & Co. 

M.  J.  IVERS  & CO..  PUBLISHERS, 

879  PEARL  STREET,  NEW  YORK. 


^rrvv^O  'UiO 


No  Income  Tax! 


HON.  DAVID  B.  HILL’S 


GREAT  SPEECH 


ON  THE 


Tariff  Bill  and  Income  Tax. 


DELIVERED  IN  THE 


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UNITED  STATES  SENATE,  AT  WASHINGTON, 

On  Monday,  April  9,  1894. 


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COMPLETE. 


NEW  YORK: 

M.  J.  IVERS  & CO.,  PUBLISHERS, 

379  PEARL  STREET. 


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SENATOR  HILL’S  SPEECH. 


The  political  revolution  which  commenced  in  1890  and 
culminated  in  1892  was  an  emphatic  expression  of  the 
popular  will  in  behalf  of  certain  governmental  policies. 
Measures,  and  not  men,  were  largely  the  issues  involved  in 
that  movement.  Rightly  interpreted,  it  indicated  the 
public  sentiment  in  opposition  to  intrenchment  upon  the 
reserved  rights  of  the  States  through  odious  Federal  elec- 
tion laws,  some  proposed,  and  others  then  existing;  it 
voiced  the  general  demand  for  a discontinuance  of  the  un- 
wise and  indefensible  financial  system  of  silver  bullion 
purchases  by  the  Government,  instead  of  the  coinage  con- 
templated by  the  Constitution — a system  equally  a hin- 
derance  to  the  return  to  bimetallism  as  wTell  as  a menace 
to  a sound  and  stable  currency;  it  manifested  the  desire 
for  a better  administration  of  public  affairs,  greater  econo- 
my in  governmental  expenditures,  and  the  exaction  of 
higher  official  standards  in  the  execution  of  public  trusts; 
it  demanded  a more  safe,  dignified,  and  consistent  foreign 
policy;  and  it  condemned  that  abuse  or  perversion  of  the 
taxing  power  of  the  Government  which  is  known  as  the 
policy  of  protection  “ for  protection's  sake  alone,"  and 
declared  in  favor  of  a tariff  for  revenue. 

Invested  with  the  responsibility  of  government,  the 
prompt  enforcement  of  these  policies  devolved  upon  the 
party  in  power.  The  wisdom  of  its  action  in  discharging 
the  duties  thus  assigned  it  by  the  suffrages  of  the  peojffe 
may  at  least  be  partially  conceded,  even  by  its  opponents. 


6 


DAVID  B.  HILL?S  GREAT  SPEECH. 


OUR  FOREIGN  POLICY. 

It  is  not  denied  that  some  mistakes  have  occurred. 
Our  foreign  policy,  especially  that  relating  to  Hawaii,  it 
must  he  admitted,  has  not  met  the  expectations  of  the 
people.  A sense  of  humiliation  prevailed  when  the  proj- 
ect for  the  restoration  of  a deposed  monarchy  was  un- 
folded by  the  Administration,  and  gratification  ensued 
when  its  abandonment  or  failure  was  reluctantly  an- 
nounced, influenced  largely  by  an  aroused  public  senti- 
ment. 

That  unfortunate  contemplated  policy  was  a blunder, 
and  a blunder  is  sometimes  worse  than  a crime.  It  was, 
however,  the  natural  consequence  which  might  well  have 
been  anticipated  from  that  other  mistake  in  placing  the 
Department  of  State  in  charge  of  a Republican  statesman, 
distinguished  and  estimable  though  he  may  be,  whose  pub- 
lic services  have  always  been  identified  in  opposition  to  the 
Democratic  party,  who  was  without  sympathy  for  its  tra- 
ditions and  purposes,  and  whose  political  convictions  upon 
the  disputed  public  questions  of  the  day,  if  changed  at  all, 
are  carefully  concealed. 

It  is  to  be  regretted  that  the  President  should  not  have 
been  able  to  find  in  his  own  party  some  safe  and  honored 
statesman  in  whom  he  and  his  party  could  have  placed  con- 
fidence, one  of  Democratic  instincts  and  training,  whose 
management  of  foreign  affairs  would  have  reflected  credit 
upon  the  country,  and  would  have  avoided  the  promulga- 
tion of  that  un-American  policy — a departure  from  Demo- 
cratic precedents — which  was  sought  to  be  forced  upon  an 
unwilling  people.  In  this  view  of  the  situation  our  op- 
ponents must  accept  some  share  of  the  responsibility  for 
the  blunders  committed  in  our  foreign  affairs. 

GOOD  GOVERNMENT. 

In  other  respects  the  present  administration  of  our  Gov- 
ernment affords  scant  grounds  for  just  criticism. 


DAVID  B.  HILL’S  GREAT  SPEECH. 


iy 


j The  various  departments  under  Democratic  control  are 
/rigidly  enforcing  economy,  and  the  pledges  to  the  people 
are  being  reasonably  fulfilled.  In  the  main,  we  are  en- 
joying an  era  of  good  government. 

REPEAL  OF  THE  FEDERAL  ELECTION  LAW. 

That  last  relic  of  post  helium  legislation,  known  as  the 
Federal  Election  law,  has  been  repealed  by  the  present 
Congress,  thus  promptly  carrying  out  one  of  the  impor- 
tant promises  of  the  Chicago  platform.  The  power  to 
control  all  their  elections  without  Federal  interference  or 
dictation,  which  the  States  always  enjoyed  from  the  foun- 
dation of  the  Government  down  to  1871,  has  been  restored 
to  them.  It  is  a triumph  for  the  just  doctrine  of  State 
.rights,  under  constitutional  limitations;  it  is  a tribute 
to  the  unselfishness  and  patriotism  of  the  Democratic 
party,  which,  discarding  the  patronage  incident  to  the  en- 
forcement of  this  law,  and  insured  to  it  by  at  least  three 
more  years*  control  of  the  Federal  Administration,  un- 
hesitatingly asserts  its  devotion  to  a principle,  and  there- 
by relieves  the  people  at  once  from  further  unnecessary 
annoyances,  useless  offices,  and  prodigal  expenditures. 

REPEAL  OF  THE  SHERMAH  LAW. 

The  repeal  of  the  Sherman  Silver  Bullion  Purchase  law 
within  the  first  eight  months  after  its  advent  to  power, 
marked  the  fulfillment  of  another  pledge  by  the  Demo- 
cratic party.  It  evidenced  our  sincerity  as  well  as  pru- 
dence. It  met  the  just  demands  of  public  sentiment. 
While  there  were  honest  and  respectful  differences  of  opin- 
ion among  many  good  Democrats  here  and  elsewhere  as 
to  what  other  or  further  legislation  ought  to  take  the 
place  of  the  repealed  law,  or  to  precede,  accompany,  or 
follow  such  repeal,  there  were  never  any  substantial 
differences  as  to  the  inadequate,  illogical,  and  indefensible 


8 DAVID  B.  HILI/S  GREAT  SPEECH. 

character  of  the  Sherman  law  itself  and  the  desirability  of 
the  redemption  of  the  party  pledge  for  its  abolition. 

That  result  has  been  accomplished.  Whether  that  high 
degree  of  prosperity  has  ensued  from  such  action  which 
some  of  our  officials  anticipated  and  others  predicted,  is 
another  and  a different  question  not  now  necessary  to  be 
considered.  It  is  sufficient  that  we  have  speedily  removed 
the  objectionable  legislation  which  our  opponents  had  fast- 
ened upon  the  country. 

REVENUE  REFORM, 

The  duty  which  now  especially  confronts  us  is  the  re- 
vision of  the  sum  and  methods  of  Federal  taxation,  conse- 
quent upon  a transfer  of  the  political  control  of  the 
Federal  Government  from  the  custody  where  it  had  been 
lodged  for  thirty-two  years. 

That  revision  should  be  approached  with  circumspection, 
and  with  a realizing  sense  of  the  changed  condition  of  the 
country  since  1887  and  1890. 

An  extreme  reduction  of  tariff  duties  at  a time  when  the 
Treasury  was  swollen  with  a surplus  of  a hundred  million 
dollars,  when  the  country  was  reasonably  prosperous,  when 
all  our  industries  were  in  motion,  and  all  our  working-men 
were  employed,  assumes  a different  aspect  and  presents 
a different  question  when  proposed  now,  with  a large 
and  growing  Treasury  deficit  instead  of  a surplus  staring 
us  in  the  face,  with  our  industries  paralyzed,  our  manu- 
factories closed,  our  working-men  idle,  and  following  upon 
the  heels  of  one  of  the  most  disastrous  financial  panics  in 
our  history. 

What  was  safe  and  prudent  and  wise  then,  it  would  be 
criminal  folly  to  attempt  now. 

THE  RECENT  MONETARY  PANIC. 

A month  prior  to  his  inauguration,  the  President  was 
forewarned  of  the  approaching  monetary  panic.  He  con- 


7 ' 

DAVID  B.  HILl/s  GREAT  SPEECH.  9 

vened  Congress  six  months  later,  when  the  panic  was  sub- 
siding which  should  have  been  averted. 

It  is  feared  that  this  Congress  does  not  keenly  appre- 
ciate the  awful  devastation  which  the  financial  cyclone  of 
last  summer  has  inflicted  upon  the  business  interests  of 
our  country.  It  has  made  havoc  of  our  prosperity,  pri- 
vate and  public.  It  has  slaughtered  private  incomes.  It 
has  paralyzed  private  industries.  It  has  forced  bank- 
ruptcies without  precedent  in  number  and  sum.  It  has 
diminished  all  domestic  and  inter-State  trade,  until  a fifth 
of  our  railroad  mileage  is  in  the  hands  of  receivers,  and  all 
our  banks  are  gorged  with  money  unemployed.  It  has 
struck  down  by  hundreds  the  captains  of  our  industry  who 
have  been  wont  to  organize  profitable  enterprises,  borrow 
capital,  and  lead  the  great  army  of  labor. 

The  past  savings  of  our  skilled  workmen  are  drawn  down. 
They  think  themselves  lucky  to  get  half-time  employ- 
ment in  these  dark  days;  and  less  skilled  laborers  by  the 
hundred  thousand  are  suffering  hunger,  willing  but  unable 
to  earn  their  daily  bread.  It  is  heart-breaking  as  a pesti- 
lence. 

HO  TIME  FOR  PARTISANSHIP. 

This  is  no  time  for  partisan  reproaches,  however  just. 
This  is  no  time  for  Democrats  to  say  to  Republicans, 
“ Your  bad  laws  did  it.”  This  is  no  time  for  Republicans 
to  say  to  Democrats,  “ Your  remedies  would  increase 
trouble.”  It  is  a time  to  fling  partisanship  to  the  winds, 
if  that  will  speed  the  deliverance  of  our  fellow-countrymen 
and  revive  our  prostrate  business  interests. 

This  Senate  is  nearly  equally  politically  divided,  and  it 
is  apparent  that  if  prompt  remedial  legislation  is  expected, 
then  radicalism  in  any  direction  must  be  discarded.  The 
critical  situation  demands  wise  and  conservative  action 
speedily  secured.  The  extreme  features  of  the  McKinley 
bill  must  be  eradicated  in  obedience  to  the  people’s  man- 


io 


DAVID  B.  HILDAS  GREAT  SPEECH. 


date,,  but  patriotism  alike  demands  that  extremes  in  the 
opposite  direction  must  also  be  avoided. 

On  the  4th  of  Marche  1893,  the  President  became  vested 
with  exclusive  power  to  convene  Congress  earlier  than  the 
law  day,  for  the  purpose  reaffirmed  in  his  election.  He 
decided  to  prolong  the  operation  of  the  McKinley  tariff  for 
at  least  another  year.  The  delay  thus  imposed  upon  the 
people’s  reforming  zeal  it  is  vain  to  regret.  In  the 
meantime,  the  monetary  panic  unfortunately  precipitated 
upon  us  has  not  only  made  havoc  of  our  private  industries, 
but  has  dried  up  the  public  revenues. 

THE  TREASURY  DEFICIT. 

The  size  of  the  Treasury  deficit  at  the  close  of  the  pres- 
ent fiscal  year  has  twice  been  estimated  by  the  Secretary 
of  the  Treasury. 

On  the  19th  of  December  he  took  its  measure.  On  the 
15th  of  January  he  took  its  measure,  the  measure  of  the 
same  deficit,  to  accrue  on  the  30th  of  June,  1894. 

These  two  measures  of  the  same  thing,  taken  twenty- 
seven  days  apart,  are  not  perfectly  identical.  In  his  an- 
nual report,  the  Secretary  of  the  Treasury  informed  Con- 
gress of  a deficit  for  the  current  fiscal  year  of  $28,000,000. 
A short  month  later,  in  his  letter  to  the  Chairman  of  the 
Senate  Finance  Committee,  the  same  Secretary  of  the 
Treasury  finds  the  same  deficit  to  be  $78,000,000. 

It  may  be  unjust  to  the  Secretary  of  the  Treasury,  as 
well  as  absurd  in  itself,  to  assume  that  suggestions  in  his 
annual  report  made  when  he  thought  the  deficit  of  the 
current  fiscal  year  to  be  $28,000,000  stand  good  after  his 
discovery  a month  later  that  the  size  of  the  deficit  is  $78,- 
000,000. 

The  same  observation  would  apply  to  the  President’s 
message  last  December  4,  dealing,  as  he  said,  with  “ exist- 
ing conditions,”  which,  in  fact,  have  ceased  to  exist,  and 
prefiguring  a bill  “ on  the  lines  herein  suggested  ” (to  wit, 


DAVID  B.  HILl/s  GREAT  SPEECH. 


11 


in  his  message) , warranted  by  him  “ to  produce  sufficient 
revenue  to  meet  the  needs  of  the  Government/ ■ ’ when 
those  needs  were  underestimated  $50,000,000.  Yet  the 
Wilson  bill,  framed  originally  upon  the  theory  suggested 
by  these  high  officials  in  their  annual  communications  to 
Congress,  underwent  no  material  change  during  its  prog- 
ress through  the  House,  'notwithstanding  the  altered  situa- 
tion. The  theory  survived  its  condition. 

In  the  face  of  the  prostration  of  private  industries,  and 
in  the  presence  of  such  a paralysis  of  all  general  business, 
as  the  Treasury  deficit  attests  and  prolongs,  this  bill,  as 
framed  by  its  authors  and  as  passed  by  the  House,  sought 
to  double  the  deficit  by  discarding  customs  revenue  and  to 
fill  the  void  with  an  income  tax. 

THE  PROTEST  OF  HEW  YORK. 

Against  such  a scheme— unnecessary,  ill-timed,  and 
mischievous —suddenly  sprung  upon  the  country  in  the 
hour  of  its  distress^  un-Democratic  in  its  nature,  and 
socialistic  in  its  tendencies — I enter  the  protest  of  the  peo- 
ple  of  the  State  of  New  York.  They  utterly  dissent  from 
any  proposal  to  get  revenue  for  the  general  Government 
by  taxing  incomes.  Their  dissent  is  practically  unanimous 
and  altogether  implacable. 

Neither  am  I satisfied  that  the  people  of  the  country 
agree  with  the  President  in  desiring  the  undebated  change, 
sudden  reversal,  and  complete  transformation  in  the  char- 
acter of  our  Federal  taxation,  from  indirect  to  direct,  in- 
volved in  the  proposed  plan  to  establish  a sort  of  taxation 
not  now  championed  by  either  of  the  parties  who  would 
have  to  administer  it,  by  all  parties  for  three  fourths  of  a 
century  justly  believed  to  be  inhibited,  then,  after  trial  in 
the  war  stress,  denounced  by  one  party  and  discarded  by 
the  other  party,  and  found  odious  throughout  the  North- 
ern States  without  distinction  of  party, 


12  DAVID  B.  HILL’S  n GREAT  SPEECH. 

HOT  RECOMMENDED  BY  THE  PRESIDENT. 

The  recommendation  in  the  President’s  annual  message 
is  cited  in  justification  of  the  proposed  tax.  It  is  as  fol- 
lows: 

A measure  has  been  prepared  by  the  appropriate  Con- 
gressional committee  embodying  tariff  reform  on  the  lines 
herein  suggested , which  will  be  promptly  submitted  for 
legislative  action.  * * * The  committee,  after  full  con- 
sideration, * * * have  wisely  embraced  in  their  plan 
a few  additional  internal  revenue  taxes,  including  a small 
tax  upon  incomes  derived  from  certain  corporate  invest- 
ments. * * * In  my  great  desire  for  the  success 
of  this  measure , I can  not  restrain  the  suggestion,  etc. 

It  will  strike  the  thoughtful  observer  familiar  with  the 
history  of  the  Government  as  a strange  and  unusual  pro- 
cedure that  the  President  of  the  United  States  should  seri- 
ously inform  Congress  of  what  one  of  its  own  committee 
has  been  doing  in  the  preparation  of  a bill.  It  might  be 
safely  assumed  that  Congress  already  had  such  informa- 
tion, unless  the  bill  had  been  prepared  in  the  Executive 
department,  and  had  been  submitted  to  the  committees 
concurrently  with  the  transmission  of  the  message  to  Con- 
gress. In  these  latter  days,  the  distinctions  between  the 
functions  and  the  prerogatives  of  the  Executive  depart- 
ment on  the  one  hand,  and  the  Legislative  department  on 
the  other,  do  not  seem  to  be  always  observed.  The  truth 
is,  that  the  first  information  which  Congress  had  of  the 
alleged  details  of  the  proposed  bill  was  in  the  message 
itself. 

But  the  strangest  part  of  this  unprecedented  proceeding 
was  that,  in  fact,  at  the  very  date  of  the  message  (to  wit, 
December  4,  1893),  neither  the  full  Committee  of  Ways  and 
Means  nor  the  Democratic  members  thereof  had  agreed 
upon  any  income  tax  or  upon  other  internal  taxation. 
The  President’s  information  was  therefore  inaccurate  as 
well  as  premature.  This  awkward  situation  was  not  im- 


DAVID  B.  HILL'S  GREAT  SPEECH. 


13 


proved  by  the  President's  expression  of  his  “ desire  for  the 
success  of  this  measure”  being,  a measure  not  yet  per- 
fected, a bill  in  an  inchoate  state. 

But  aside  from  any  question  of  impropriety  involved  in 
the  recommendation  of  a particular  measure,  or  of  an  in- 
complete measure,  instead  of  a general  recommendation 
of  tariff  reform,  leaving  details  to  the  discretion  of  Con- 
gress, and  while  conceding  that  the  President  in  the  first 
suggestion  of  a limited  income  tax  injected  the  poison  which 
has  now  spread  until  it  has  developed  into  a general  income 
tax,  nevertheless,  the  latter  scheme  can  not  find  any  real 
justification  in  the  President's  message. 

lie  does  not  recommend  a general  income  ta,y  upon  all 
the  income  of  individuals,  but  only  a tax  upon  such 
limited  income  as  .may  be  “ derived  from  certain  corporate 
investments." 

NEITHER  BY  SECRETARY  CARLISLE. 

Secretary  Carlisle  in  his  annual  report  is  equally  guard- 
ed, and  insists  upon  the  same  limitation.  His  report  as- 
sumed that  there  was  no  possibility  of  the  adoption  of  a 
general  income  tax  such  as  formerly  existed,  and,  while 
apparently  conceding  the  odious  and  inquisitorial  char- 
acter of  such  tax,  and  its  liability  to  evasion,  he  defends  a 
limited  tax  upon  incomes  derived  from  corporate  invest- 
ments, upon  the  plausible  ground  that  “the  assessments 
or  returns  need  not  be  based  upon  information  extorted  by 
the  law  from  the  persons  charged  with  their  payment,  but 
upon  Ike  'public  records  and  the  regular  and  authentic  ac- 
counts of  the  corporations  and  companies  in  which  the  in- 
vestments have  been  made;  and  they  have  the  additional 
merit  of  being  imposed  entirely  upon  that  part  of  the  citi- 
zen's income  which  is  not  earned  by  his  labor  or  skill , but 
which,  in  the  cases  of  legacies  and  successions,  is  acquired 
by  mere  operation  of  law,  or  by  gratuitous  bequests,  and, 
in  the  case  of  incomes  from  investments,  in  corporations 


14 


DAVID  B.  HTLl/s  GREAT  SPEECH." 


and  joint  stock  companies,  by  the  simple  earning  capacity 
of  his  capital  as  such,  without  personal  effort  on  Ms  part 

Yet,  disregarding  or  exceeding  the  recommendations  of 
the  President  and  Secretary  of  the  Treasury,  this  bill  pro- 
poses to  tax  all.  the  income  of  an  individual,  whether 
“earned  by  his  labor  or  skill/’  or  otherwise,  and  to  ob- 
tain the  necessary  information,  not  from  an  inspection  of 
public  records,  but  from  an  investigation  of  all  his  private 
books  and  papers. 

A Federal  income  tax,  whether  limited,  as  suggested  by 
the  President  and  the  Secretary  of  the  Treasury,  or  gen- 
eral, as  provided  in  this  bill,  is  equally  objectionable. 

THE  “ FRANCHISE  ” ARGUMENT. 

The  argument  that  a Federal  tax  upon  incomes  derived 
from  corporate  investments  may  with  propriety  be  im- 
posed, because  corporations  are  invested  by  law  with 
valuable  franchises  not  enjoyed  by  the  individual  citizen, 
would  have  more  weight  if  such  franchises  were  usually 
granted  by  Federal  instead  of  State  authority.  The  re- 
verse is  just  the  fact,  however,  and  while  State  authorities 
might  with  much  reason  upon  such  grounds  tax  the  fran- 
chises as  well  as  the  earnings  and  dividends  of  such  cor- 
porations for  the  support  of  their  State  Governments,  the 
Federal  Government  has  no  particular  standing  or  equities 
for  such  purpose.  It  is  immaterial  to  the  general 
Government  whether  it  is  an  individual  or  a corpora- 
tion that  is  in  receipt  of  income,  as  the  right  or  pro- 
priety of  taxing  such  income  is  no  greater  in  one  case  than 
in  the  other,  except  in  the  rare  instances  where  the  cor- 
poration may  have  received  its  charter  through  national 
favor.  This  bill  taxes  both  individual  and  corporate  in- 
comes alike. 

In  New  York  and  in  several  other  States  a “ franchise  ” 
tax  is  imposed  upon  the  earnings  of  certain  corporations, 
an  income  tax*  guch  m is.  proposed  in  this  measure, 


DAVID  B.  HILL  S GREAT  SPEECH. 


IS 


would  duplicate  the  taxation  already  imposed,  and  compel 
the  States  to  abandon  their  State  taxation.  This  is  a 
most  important  and  serious  objection  to  this  feature  of  the 
bill 

In  New  York  alone  there  was  last  year  received  from 
State  taxation  on  the  capital  and  earnings  of  corporations 
the  sum  of  $1,606,047.45,.  excluding,  of  course,  the  taxa- 
tion of  their  real  estate  and  personal  property  and  any 
local  taxation.  In  the  same  State  there  was  also  received 
last  year  the  sum  of  $3,071,687.09  from  the  State  inherit- 
ance and  gift  tax.  These  taxes,  from  which  the  State  de- 
rives these  enormous  sums,  could  not  well  be  maintained 
or  collected  without  the  most  extreme  hardship  in  the 
event  of  the  enactment  of  this  bill,  which  taxes  the  same 
sources  two  per  cent. 

It  follows  that  the  State  taxes  would  necessarily  have  to 
be  abandoned,  and  the  amounts  heretofore  received  would 
have  to  be  collected  from  real  estate  or  in  other  ways. 
New  York’s  interest  in  opposition  to  this  feature  of  the 
proposed  bill  can  thus  be  appreciated. 

THE  INJUSTICE  NOT  MITIGATED. 

Neither  is  the  injustice  of  the  proposed  corporate  tax 
mitigated  by  the  fact  that  it  is  against  corporations  rather 
than  against  individuals,  because,  although  in  form  im- 
posed upon  the  corporations,  the  amount  thereof  is  de- 
ducted from  the  dividends  paid  to  the  individual  stock- 
holders, and  it  is  virtually  a tax  upon  individuals,  for  all 
practical  purposes. 

The  individual  stockholders  are  not  necessarily  the  rich, 
but  they  usually  include  all  classes,  and  frequently  among 
them  are  found  widows,  orphans,  trustees,  and  executors, 
and  persons  of  ordinary  means  who  have  invested  their 
all  in  these  corporate  securities,  relying  upon  their  divi- 
dends for  their  support. 

If  the  suggestion  for  the  taxation  of  incomes  “derived 


16  DAVID  B.  HILL'S  GREAT  SPEECH. 

from  corporate  investments"  was  largely  based  for  its 
acceptability  to  the  people  upon  the  well-understood  popu- 
- lar  prejudice  against  corporations,  the  proposition  has  a 
very  weak  moral  support,  because,  after  all,  it  is  the  in- 
dividual stockholders  whose  dividends  would  be  dimin- 
ished and  who  would  be  seriously  injured  by  the  proposed 
tax. 

A Federal  tax  upon  the  earnings  or  dividends  of  cor- 
porations is  no  more  defensible  than  such  tax  upon  the 
earnings  of  individuals. 

THE  TAX  TOO  LARGE. 

This  bill  neither  follows  the  recommendations  of  the 
President  and  the  Secretary  of  the  Treasury  as  to  the  kind 
of  income  tax  desired,  nor  as  to  the  amount  or  rate  of  the 
tax  itself. 

The  President,  preferring  to  be  specific,  but  cautious, 
recommended  simply  “ a small  tax  upon  incomes."  The 
Secretary  suggested  a tax  of  one  per  cent.  The  bill  re- 
pudiates both  suggestions,  and  adopts  a tax  of  two  per 
cent,  on  all  incomes  over  $4,000,  no  matter  how  large  the 
excess  may  be. 

AN  IHDEFEHSIBLE  EXEMPTIOM. 

This  exemption  of  so  much  as  $4,000  necessarily  leads 
to  considerable  criticism.  If  an  income  tax  is  justifiable 
at  all,  it  is  difficult  upon  theory  to  defend  any  exemptions, 
at  least  of  any  material  amount.  Exemptions  are  merely 
a matter  of  governmental  charity  or  favor,  and  not  a mat- 
ter of  strict  right,  and  being  in  derogation  of  a general 
principle,  they  should  not  be  unreasonably  large.  If  in- 
comes are  properly  taxable,  then  all  incomes  should  be 
taxed,  of  whatever  amount;  taxed  proportionately,  with- 
out favoritism  to  any  individual  or  class.  The  man  of 
moderate  means  should  pay  as  well  as  the  man  of  wealth, 
both  “according  to  what  incomes  they  actually  receive,  no 


DAVID  B.  HILl/s  GREAT  SPEECH.  1? 

more  and  no  less,  and  no  matter  what  the  amount  may 
be,  great  or  small.  This  must  be  the  correct  theory  of  an 
income  tax,  if  any  it  has. 

Such  a tax  being  largely  of  foreign  origin,  and  having 
been  imported  into  this  country  and  injected  into  this  bill, 
it  might  be  expected  that  the  exemptions  would  follow 
foreign  precedents.  Prussia  only  tolerates  an  exemption 
of  $225.  In  Germany  the  exemption  varies  from  $70  to 
$600.  In  Denmark  it  is  $215,  Austria  $113,  and  in  Eng- 
land $750.  Yet  here  the  proposed  exemption  is  to  be  the 
liberal  sum  of  $4,000,  a figure  for  which  there  is  no  prec- 
edent anywhere  in  the  world.  So  large  an  exemption 
necessarily  creates  a numerous  class  receiving  a respectable 
income,  twice  as  much  as  is  ordinarily  necessary  to  furnish 
a fair  living,  who  pay  no  tax  whatever.  This  necessarily 
creates  a privileged  or  exempted  class  on  the  one  hand  as 
against  a tax -paying  class  on  the  other. 

When  real  estate  is  taxed,  all  that  the  individual  owns 
is  taxed  without  the  exemption  of  any  part.  So  with  per- 
sonal property,  aside  from  a few  unimportant  exceptions. 
So  with  the  earnings  of  corporations — all  are  taxed,  or 
none  at  all.  The  same  principle  applies  to  the  oleomar- 
garine and  the  State  bank  tax — there  are  no  exemptions 
tolerated.  But  in  the  strenuous  efforts  to  popularize  this 
war  tax  in  time  of  peace,  every  just  principle  of  taxation 
is  either  violated  or  unreasonably  extended. 

DAVID  A.  WELLS'  VIEWS. 

The  Honorable  David  A.  Wells,  of  Connecticut,  con- 
tributes an  able  and  interesting  article  in  the  Forum  of 
last  month  in  opposition  to  an  income  tax.  His  attitude 
upon  this  question  may  create  a suspicion  of  his  loyalty  to 
the  cause  of  tariff  reform  in  the  minds  of  a select  coterie 
of  overzealous  professional  reformers  with  which  the  coun- 
try is  afflicted,  but  not  in  the  minds  of  the  American  peo- 
ple. Mr.  Wells  was  a sincere  and  radical  friend  of  reve-. 


18  DAVID  B.  HILDAS  DDE  AT  SPEECH. 

nue  reform  many  long  years  before  any  politician  or 
official  selfishly  sought  to  monopolize  it  as  his  own  par- 
ticular hobby,  and  his  sentiments  will  carry  much  weight 
with  thinking  men.  Upon  the  precise  point  which  I am 
discussing,  he  writes  as  follows: 

The  authors  of  the  proposed  income  tax  now  before 
Congress  especially  proclaim  that  the  chief  object  sought 
by  them  in  this  measure  is  to  transfer  the  burdens  of  the 
State  from  the  shoulders  of  the  poor  to  those  of  the  rich. 
It  is,  therefore,  interesting  to  note  where  they  propose  to 
draw  the  line  in  respect  to  charity,  and  as  to  the  amount  of 
property,  the  possession  or  enjoyment  of  which,  in  their 
opinion,  constitutes  riches. 

If  we  assume  five  per  cent,  as  about  the  present  annual 
average  profit  on  money,  land,  or  other  property  in  the 
United  States  over  and  above  all  charges  and  taxes,  then 
an  exemption  of  $4,000,  in  an  assessment  under  an  income 
tax,  would  represent  an  accumulation,  or  business,  or  pro- 
fession, of  the  value  of  $80,000.  If  we  take  the  rate  at 
which  the  United  States  can  borrow  money,  namely,  three 
per  cent.,  then  an  exemption  of  $4,000  would  represent  an 
accumulation  of  a citizen  invested  in  United  States  securi- 
ties of  $133,333.  And  according  to  any  fair  interpreta- 
tion of  the  action  of  the  committee  reporting  a $4,00.0 
exemption,  a citizen  who  is  worth  less  than  $80,000  of 
ordinary  property  yielding  income  or  $133,000  of  property 
invested  in  United  States  bonds,  is  a legitimate  object  of 
national  charity;  the  above  sums  representing  the  dividing 
line  in  the  United  ^States  between  those  who  are  entitled 
to  be  regarded  as  poor  and  those  who  are  entitled  to 
be  considered  rich.  Such  an  assumption  finds  no  prec- 
edent in  fiscal  history.  Such  an  exemption  is  unwarrant- 
ed favoritism  to  nine  tenths  of  the  well-to-do  people  of  the 
United  States  who  are  abundantly  able  to  pay  any  just 
proportion  of  the  taxes  which  the  Government  finds  it 
necessary  to  impose  for  its  support. 

No  man  is  a freeman  whose  industry  and  capital  are 
subject  to  exaction,  and  from  which  his  immediate  com- 
petitors are  entirely  exempt.  Equality  of  taxation  of  all 
persons  and  property  brought  into  open  competition  under 
like  circumstances  is  necessary  to  produce  equality  of  con- 
dition for  all,  in  all  production,  and  in  all  the  enjoyments 


DAVID  B.  HILL'S  GREAT  SPEECH.  19 

of  life;  liberty,  and  property.  And  government,  whatever 
name  it  may  assume,  is  a despotism,  and  commits  acts  of 
flagrant  spoliation  if  it  grants  exemption  or  exacts  a 
greater  or  less  rate  of  tax  from  one  man  than  from  an- 
other man  on  account  of  the  one  owning  or  having  in  his 
possession  more  or  less  of  the  same  class  of  property  which 
is  subject  to  the  tax. 

If  it  were  proposed  to  levy  a tax  of  two  per  cent,  on  an- 
nual incomes  below  $4,000  in  amount,  and  exempt  all  in- 
comes above  this  sum,  the  unequal  and  discriminating 
character  of  the  exemption  would  be  at  once  apparent; 
and  yet  an  income  tax  exempting  all  incomes  below  $4,000 
is  equally  unjust  and  discriminating.  In  either  case  the 
exemption  can  not  be  founded  or  defended  on  any  sound 
principles  of  free  constitutional  government,  and  is  simply 
a manifestation  of  tyrannical  power  under  whatever  form 
of  government  it  may  be  enforced.  The  great  republican 
principle  of  equality  before  the  law  and  constitutional  lawr 
itself,  alike  preclude  any  exemption  of  income  derived 
from  like  property. 

I can  add  nothing  to  the  force  of  these  observations. 

IT  LS  INQUISITORIAL. 

An  income  tax  is  objectionable  because  from  its  very 
nature  it  must  be  inquisitorial  in  its  imposition  and  collec- 
tion. The  senior  Senator  from  Indiana  [Mr.  Vorhees] 
calls  this  allegation  a “ noisy  and  resounding  charge." 
Let  me  tell  him  that  it  is  not  half  so  noisy  as  the  constant 
vituperations  which  we  hear  on  every  hand  from  blatant 
demagogues  who  are  abroad  in  the  land  loudly  inveighing 
against  the  wealth  of  the  country,  and  impudently  de- 
manding its  confiscation  through  every  means  which  their 
devilish  ingenuity  can  invent. 

The  charge  is  indeed  a “resounding"  one!  It  was 
heard  years  ago  in  France  against  unjust  and  arbitrary 
taxes  when  Talleyrand  and  others  declared  that  “ every 
system  of  taxation  which  necessitates  personal  and  arbi- 
trary inquisitions  for  its  execution  is  inconsistent  with  the 
rnaintainance  of  a free  people,"  The  eharge  has  “ re- 


20  DAVID  B.  HILL’S  GREAT  SPEECH, 

bounded  ” all  over  the  world  whenever  despotisms  have 
attempted  to  enforce  similar  taxes  to  the  annoyance  and 
detriment  of  the  people.  The  charge  that  this  tax  is  in- 
quisitorial is  scarcely  denied  even  by  the  distinguished 
Senator  from  Indiana,  and  is  only  attempted  to  be  palli- 
ated by  the  pretense  that  other  taxes  are  equally  so;  but 
there  is  no  foundation  even  for  this  pretense. 

Keal  estate  is  open  and  above  board;  its  value  is  easily 
ascertainable,  and  its  taxation  presents  no  offensive 
features.  Under  ordinary  laws  the  assessors  have  no 
right  to  enter  and  ransack  your  premises.  Your  home  is 
your  castle,  and  it  is  sacred  from  intrusion.  The  taxation 
of  personal  property  presents  difficulties,  of  course,  but 
visible  personality  may  be  readily  reached  without  annoy- 
ance to  the  owner.  The  taxation  of  corporate  property  is 
easily  effected  by  general  inquiry  and  an  inspection  of  pub- 
lic or  other  records  usually  accessible. 

The  fact  that  in  a few  States  of  the  Union  tax  laws  have 
been  adopted  which  unnecessarily  pry  into  the  taxpayers’ 
private  affairs,  and  are  usually  harsh  and  offensive,  furnishes 
no  argument  why  they  should  be  selected  as  models  for 
the  whole  United  States.  They  are  exceptional  in  their 
character  and  should  not  be  followed. 

If  they  are  cited  to  show  their  acceptibility  to  the  j>eo- 
ple,  I might,  on  the  other  hand,  point  to  the  fact  that  in- 
come taxes  are  so  distasteful  that  they  have  been  tolerated 
in  only  a very  limited  number  of  States. 

Neither  does  the  circumstance  that  the  Government,  in 
the  collection  of  our  customs  duties,  insists  upon  the  inspec- 
tion of  the  baggage  of  passengers  entering  the  country  in 
order  to  prevent  frauds  upon  the  revenue — and  sometimes 
searches  their  persons — afford  any  justification  for  the  en- 
actment of  an  income  tax,  the  collection  of  which  must 
largely  depend  upon  inquisitorial  proceedings.  One  pro- 
cedure is  necessary  and  unavoidable,  the  other  is  not. 
One  law  is  framed  principally  to  reach  foreigners  and 


DAVID  B.  HILI/S  GREAT  SPEECH. 


21 


strangers  entering  the  country,  while  the  other  applies 
almost  entirely  to  our  own  citizens.  One  has  the  safe  prec- 
edents of  centuries  to  support  it,  the  other  is  the  modern, 
or,  at  least,  the  bad  invention  of  monarchical  governments. 

A municipality  has  the  right  to  compel  individual  vac- 
cination in  the  interest  of  the  public  health,  but  this  rea- 
sonable and  indispensable  exercise  of  authority  would  afford 
no  excuse  for  the  establishment  of  an  elaborate  system  for 
the  enforced  general  attendance  of  public  physicians  upon 
individual  citizens  and  their  families.  There  is  reason  in 
all  things,  and  one  necessary  and  proper  encroachment 
upon  the  absolute  personal  freedom  of  the  citizen  should 
not  be  made  the  pretext  for  other  and  more  extensive 
ones  which  afe  obnoxious  to  a free  people  and  consistent 
only  with  despotism. 

ITS  BAD  FEATURES. 

This  bill  compels  the  taxpayer,  under  severe  pains  and 
penalties,  to  make  a return,  under  oath,  of  his  income, 
whereby  he  discloses  all  his  private  affairs  and  business  to 
the  agents  of  the  Government;  and  if  in  the  opinion — the 
mere  belief—  of  such  agents,  the  return  is  false,  fraudulent, 
or  contains  any  misstatements,  they  may  arbitrarily  sum- 
mon the  citizen  before  them,  with  all  his  books  and  papers, 
and  compel  him  to  submit  to  examination  under  oath. 
They  may  question,  cross-examine,  and  annoy  him  to  their 
hearts’  content.  There  is  no  limit  fixed  anywhere. 

- The  hearing  is  conducted  in  secret;  there  is  no  tribunal 
or  judge  to  regulate  or  check  them;  no  one  to  prevent 
improper,  impertinent,  or  insulting  questions;  no  one  to 
protect  the  witness  in  his  rights — he  refuses  to  answer  at 
his  peril.  Neither  is  that  all;  they  may  “ enter  into  and 
upon  his  premises,”  and,  presumably,  into  the  very  sanctity 
of  his  home,  to  obtain  “ from  their  own  view,”  as  the 
statute  says,  any  additional  information  they  may  desire. 
All  this  is  to  be  tolerated  and  sanctioned  by  a free  peo- 


22  DAVID  B.  HILL’S  GREAT  SPEECH. 

pie  to  enable  the  Government  in  time  of  jieace  to  extort 
from  a limited  class  engaged  in  laudable  occupations,  who, 
by  reason  of  their  good  fortune,  their  brains,  their  enter- 
prise, or  their  pluck,  have  accumulated  a little  more  of 
this  world’s  goods  than  their  fellows,  when  other  and 
ample  and  better  sources  of  revenue  are  always  accessible. 
The  provisions  of  this  bill  are  dangerous  in  the  extreme. 
What  temptations  they  offer!  of  what  abuses  they  are 
capable ! what  vast  powers  they  confer ! 

These  officials  of  the  Government,  intrusted  with  these 
enormous  powers,  would  not  hold  their  positions  for  life  or 
during  good  behavior,  as  in  European  countries  where  in- 
come taxes  are  fostered,  but  they  would  be  partisans, 
subservient  and  anxious  to  please — removable  at  pleasure. 

What  opportunities  such  laws  and  such  officials  would 
afford  to  an  unscrupulous  Administration  desiring  to  assail 
and  injure  its  political  adversaries,  or  to  build  up  a per- 
sonal faction  of  its  own! 

This  bill  also  provides  for  the  official  supervision  of  the 
business  of  corporations  by  requiring  all  tlieir  transactions 
to  be  spread  upon  their  books,  and  to  be  open  to  the  in- 
sjiection  at  all  reasonable  times  of  66  any  internal  revenue 
officer  or  agent.”  The  House  bill  sought  to  restrict  such 
inspection  so  that  it  should  only  be  had  whenever  neces- 
sary for  the  purpose  of  verifying  the  returns  made  by  such 
corporations,  and  at  no  other  time;  but  the  Finance  Com- 
mittee, presumably  under  the  lead  of  the  Senator  from 
Indiana  [Mr.  Vorhees],  whose  zeal  in  behalf  of  this  tax 
seems  to  have  outrun  his  discretion,  have  amended  the 
House  bill  so  as  to  remove  all  such  restrictions,  and  to 
place  the  books  of  such  corporations  absolutely  at  the  dis- 
posal of  the  officials  at  all  times . 

ITS  POWERS  WILL  BE  ABUSED. 

But  it  is  said  that  these  extraordinary  powers  and  privi- 
leges raav  not  be  abused,  and  it  is  also  urged  that  the  pro- 


DAVID  B.  HILl/s  GREAT  SPEECH.  ■''! 

visions  punishing  by  a fine  not  exceeding  $1,000,  or  by 
imprisonment  not  exceeding  a year,  or  both,  at  the  dis- 
cretion of  the  court,  any  official  who  makes  public  any  in- 
formation obtained  by  him  in  the  discharge  of  his  duties, 
are  sufficient  to  prevent  disclosures  of  the  citizens  business 
and  private  affairs.  * 

Experience  has  demonstrated  that  such  penal  provisions 
afford  little  protection  to  the  people.  There  are  statutes 
which  forbid  the  disclosure  of  the  contents  of  telegrams, 
but  leaks  are  constantly  discovered.  Grand  juries  are 
sworn  to  secrecy,  but  their  proceedings  often  prematurely 
reach  the  public  ear.  The  executive  sessions  of  our  Sen- 
ate are  secret,  but  the  newspapers  generally  manage  in 
some  mysterious  way  to  find  out  all  they  ought  to  know. 
Our  post-office  officials  are  human  and  curious,  and 
hence  severe  statutes  do  not  prevent  frequent  complaints 
of  the-opening  of  letters.  It  is  evident  that  the  chief  re- 
liance of  the  citizen  for  the  secrecy  of  his  business  and 
private  affairs  must  be  upon  the  absence  of  any  law,  no 
matter  how  strict,  compelling  their  disclosure  to  any 
one.  ^ 

The  people  of  this  country  nearly  everywhere  enjoy  the 
privilege  of  a secret  ballot,  but  they  would  regard  that 
privilege  as  abridged  and  that  secrecy  as  absolutely  de- 
stroyed if  the  contents  of  their  ballot  were  required  to  be 
exhibited  to  the  inspectors,  although  such  inspectors  were 
sworn  to  secrecy  and  a disclosure  were  made  a penal 
offense.  It  is  immaterial  to  me  how  Senators,  unmindful 
of  the  personal  rights  and  liberties  of  the  people,  may  re- 
gard the  conceded  inquisitorial  features  of  this  bill.  But 
it  is  a satisfaction  to  know  that  the  best  thought  and  the 
fairest  minds  of  the  nation  are  opposed  to  them. 

The  Supreme  Court  of  the  United  States,  in  the  case  of 
Boyd  vs . United  States  (116  U.  S.  Bep.,  631)  expressed 
its  opinion  of  similar  legislation  in  the  following  vigorous 
language: 


24 


DAVID  B.  HILL’S  GREAT  SPEECH. 


Any  compulsory  discovery,  by  extorting  the  party’s 
oath,  or  compelling  the  production  of  his  private  books 
and  papers  to  convict  him  of  a crime  or  to  forfeit  his  prop- 
erty, is  contrary  to  the  principles  of  a free  government. 

It  is  abhorrent  to  the  instincts  of  an  Englishman.  It  is 
abhorrent  to  the  instincts  of  an  American.  It  may  suit 
the  purposes  of  despotic  power,  but  it  can  not  abide  the 
pure  atmosphere  of  political  liberty  and  personal  freedom. 

I commend  these  patriotic  and  pertinent  utterances  to 
the  attention  of  the  aj3ologists  for  this  bill. 

The  provisions  of  this  bill  violate  the  spirit  of  the  con- 
stitutional provision  which  declares  that  “ the  right  of  the 
people  to  be  secure  in  their  persons,  houses,  papers,  and 
effects  against  unreasonable  searches  and  seizures  shall  not 
be4  violated.” 

The  appliances  of  compulsory  examination  and  inspec- 
tion which  the  bill  invokes,  render  its  provisions  extremely 
odious,  and  antagonize  the  citizens’  sacred  right  of  pri- 
vacy. The  recent  experiences  in  South  Carolina  illustrate 
the  difficulties  often  attending  the  enforcement  of  an  un- 
popular law. 

ELEMENTS  OF  INJUSTICE  AND  INEQUALITY. 

The  public  should  not  be  misled  into  the  belief  that  only 
those  whose  incomes  exceed  $4,000  are  affected  by  this 
bill.  That  is  a mistaken  idea. 

In  the  first  place,  all  those  having  incomes  less  than 
$4,000,  but  more  than  $3,500,  are  put  to  the  annoyance 
of  making  sworn  returns,  and  they  neglect  it  at  their 
peril.  (See  section  56.) 

In  the  second  place,  it  may  reasonably  be  apprehended 
that  some  portion  of  the  tax  paid  will  reimburse  itself  by 
an  increase  of  rents  where  the  income  was  derived  from 
that  source.  State  taxes  upon  land  regulate  to  some  ex- 
tent the  amount  of  the  rent  demanded  by  the  landlord. 
So  poor  tenants  may  be  affected  in  some  degree  as  well  as 
rich  landlords.  The  bill  seriously  affects  the  rights  and 


DAVID  B.  HILl/S  GEE  AT  SPEECH.  . 25 

interests,  as  they  have  been  heretofore  enjoyed,,  of  building 
and  loan  associations  throughout  the  country  incorporated 
under  State  laws.  The  Senate  amendments  do  not  cure 
the  defects  complained  of. 

The  salaries  of  State,  county,  and  municipal  officers  are 
exempt  (necessarily  so,  as  is  alleged),  while  the  salaries  of 
faithful  employees  in  private  employment — their  next- 
door  neighbors,  perhaps — are  subject  to  the  tax. 

The  professional  man  will  feel  more  keenly  the  tax  upon 
his  salary  than  one  whose  income  is  derived  from  invested 
property. 

At  every  point  there  is  an  element  of  injustice  and  in- 
equality which  renders  an  income  tax  indefensible  except 
as  a war  tax.  That  portion  of  the  act  which  provides  for 
a tax  upon  live  stock,  wool,  butter,  cheese,  beef,  etc. , and 
general  productions  from  real  estate,  “ less  the  amount 
expended  in  the  purchase  or  productoin  of  said  stock  or 
produce,”  and  which  allows  “ necessary  expenses  actually 
incurred  in  carrying  on  any  business,  occupation,  or  pro- 
fession,” to  be  deducted  in  estimating  the  income,  opens 
the  way  for  evasions,  virtual  frauds,  fictitious  or  extra- 
vagant expenses,  overcharges,  and  a hundred  different, 
means  whereby  the  income  will  be  reduced  without  actual 
fraud  or  perjury,  and  there  is  no  practical  remedy.  The 
enforcement  of  the  law  will  descend  into  a system  of 
favoritism,  will  lead  to  endless  litigations,  and  the  reve- 
nues derived  will  be  disappointing. 

IT  IS  UNDEMOCKATIC  AXD  UUJUST. 

Let  me  inquire  whence  came  this  recent  and  unnecessary 
clamor  for  the  imposition  of  an  income  tax  as  the  policy 
of  the  Government?  Nothing  was  heard  in  its  behalf  on 
the-  part  of  either  of  the  two  great  political  parties  in  the 
campaign  of  1892.  Neither  the  Republican  nor  Demo- 
cratic platform  proposed  any  such  method  of  raising  reve- 
nues. No  prominent  Democrat  or  Republican  suggested 


20  DAYID  13.  HILI/S  GREAT  SPEECH. 

any  such  measure.  Its  approval  was  limited  to  the  plat- 
form of  the  newly  formed  Populist  party,  and  its  advocacy 
was  restricted  to  Populist  orators. 

But  no  sooner  was  the  campaign  of  1892  ended  than  we 
find  it  seriously  proposed  by  a Democratic  Congress  to 
steal  the  thunder  of  the  Populist  party  by  adopting  one 
of  its  principles.  I object  to  becoming  a particeps 
cr minis  in  any  such  larceny.  I protest  against  the 
Democratic  party  being  made  a tail  to  the  Populist  kite. 
I deny  the  right  of  a Democratic  Congress  to  make  new 
principles  for  our  party  not  sanctioned  by  its  representa- 
tives in  national  convention  duly  assembled. 

We  must  look  in  vain  to  find  a single  utterance  in  favor 
of  the  scheme  of  Federal  income  taxation  in  any  Demo- 
cratic national  platform  from  the  organization  of  the  Gov- 
ernment down  to  the  present  hour.  Yet  in  spite  of  this 
record  this  scheme  has  been  injected  into  a revenue-tariff 
bill  (so  called),  and  the  support  of  the  measure  as  a whole 
is  sought  to  be  made  the  test  of  our  Democracy.  For  one 
I repudiate  any  such  doctrine  and  decline  to  recognize  any 
such  test. 

The  Constitution  of  the  United  States  may  well  be  in- 
voked in  this  discussion. 

A careful  perusal  of  that  instrument  shows  that  its 
framers  contemplated  that  the  revenues  of  the  Govern- 
ment should  be  mainly  derived  from  the  duties  upon  im- 
ports. 

It  is  true  that  the  power  to  impose  internal  taxes  and 
direct  taxes  was  conferred  upon  Congress,  together  with 
the  power  to  collect  import  duties,  yet  it  was  only  the 
latter  field  of  taxation  that  the  States  were  forbidden  to 
encroach  upon. 

Article  I.,  Section  10,  Subdivision  2 of  the  Constitution, 
provides  as  follows: 

No  State  shall,  without  the  consent  of  the  Congress,  lay 
any  imposts  or  duties  on  imports  or  exports.  * * * 


David  b.  hili/s  great  speech.  27 

This  source  of  revenue  being  thus  expressly  and  exclu- 
sively reserved  for  the  general  Government,  while  all  other 
sources  were  permitted  to  remain  open  to  the  States,  it  in- 
dicates the  intention  of  our  early  statesmen  that  the  needs 
of  the  Government  should  be  or  were  expected  to  be  sup- 
plied practically  from  tariff  taxation  alone. 

From  that  sole  source  they  have  always  been  supplied 
during  all  Administrations  from  the  early  history  of  the 
country,  save  during  the  war  period,  with  the  addition, 
however,  since  then  of  internal  taxes  upon  liquors  and 
tobacco  (and  one  or  two  minor  articles  or  sources),  which, 
for  exceptional  reasons  apparent  to  all,  have  been  ap- 
proved or  tolerated.  But  aside  from  these  exceptions,  the 
policy  of  the  Government  has  been  uniform  in  favor  of 
taxation  upon  imports  rather  than  internal  taxation  or  direct 
taxes  as  a means  of  supplying  the  necessary  revenues. 

PRESIDENT  CLEVELAND  ON  RECORD. 

President  Cleveland  in  his  second  annual  message  in 
1886  approves  this  course  in  the  following  language: 

It  has  been  the  policy  of  the  Government  to  collect  the 
principal  part  of  its  revenues  by  a tax  upon  imports;  and 
no  change  in  this  policy  is  desirable . 

Yet  the  fact  can  not  be  disguised  that,  notwithstanding 
these  accumulated  evidences  of  Democratic  sentiment,  the 
authors  of  this  bill  in  the  House  deliberately  set  themselves 
at  work  to  make  extreme  reductions,  unnecessary  changes, 
and  violent  alterations  in  existing  tariff  rates — rates  not 
warranted  by  existing  business  conditions,  and  lower  than 
in  the  Mills  bill — for  the  very  purpose  of  creating  a neces- 
sity for  the  imposition  of  a tax  upon  incomes. 

DESIGNED  AS  A PERMANENT  POLICY. 

This  proposed  tax  is  not  advocated  as  a temporary  ex- 
pedient; there  is  no  limitation  fixed  to  its  duration,  but  it 
is  boldly  proposed  as  a permanent  policy  of  the  Govern- 


28 


DAVID  B.  HILl/s  GREAT  SPEECH. 


ment;  its  injustice  is  vigorously  defended,  its  discrimina- 
tions are  heartily  approved,  and  its  illy  concealed  section- 
alism is  unblushingly  excused. 

The  Ways  and  Means  Committee  of  the  House,  as  well 
as  the  House  itself  and  the  Senate  Finance  Committee,  re- 
fused to  fix  a definite  term  for  the  continuance  of  this  tax. 

It  is  clear  that  it  was  not  designed  for  temporary  relief 
merely,  but  if  once  enacted  will  stand,  like  every  other 
portion  of  the  bill,  until  repealed. 

The  country  should  not  be  deceived  upon  this  subject, 
nor  be  misled  by  specious  promises  of  relief  not  contained 
in  the  measure  itself,  nor  indulge  in  the  vain  hope  that  if 
once  established,  the  clamor  for  its  continuance  will  soon 
die  out.  The  character  of  the  speeches  made  in  the  House 
in  its  favor,  the  appeals  of  that  portion  of  the  press  which 
favor  it,  and  all  the  reasons  which  are  publicly  and  pri- 
vately urged  for  its  enactment,  proceed  upon  the  theory 
that  it  ought  to  become,  and  is  intended  to  become,  a part 
of  our  permanent  system  of  Federal  taxation.  That  is 
the  goal  for  which  its  friends  are  struggling,  and  they  will 
be  satisfied  with  nothing  less. 

The  plain  issue  which  we  are  to  meet  is  indirect  versus 
direct  taxation. 

Mr.  Thomas  G.  Sherman,  of  Brooklyn,  a theoretical  re- 
former, and  an  intelligent  and  earnest  disciple  of  Mr. 
Henry  George’s  single  tax  theory,  as  well  as  an  advocate 
of  an  income  tax,  began  his  able  address  before  the  Ways 
and  Means  Committee  on  October  16  last,  as  follows: 

It  is  high  time  that  some  form  of  practically  direct 
taxation  should  be  resorted  to  by  the  Federal  Government. 

It  should,  however,  be  stated  that  Mr.  Sherman  opposed 
an  individual  income  tax,  but  favored  the  taxation  of  in- 
comes from  certain  corporate  investments.  I have  not 
been  informed  who,  if  anybody,  favored  an  individual 
income  tax  before  that  committee. 


DAVID  B.  HILl/s  GREAT  SPEECH.  29 

We  do  not  contend  that  the  system  of  taxation  upon 
imports  absolutely  prevents  all  inequality  or  injustice.  It 
is,  of  course,  not  a perfect  system.  Equal  and  exact 
justice  to  each  individual  citizen  is  not  possible  under  any 
method  of  taxation  likely  to  be  devised.  But  Federal 
taxations  upon  foreign  importations — taxation  upon  con- 
sumption, if  you  please — indirect  taxation  imposed  upon 
what  you  buy  and  use — is  preferable  to  direct  taxation  of 
any  kind.  The  fathers  of  the  Republic  so  regarded  it 
when  they  adopted  tariff  taxation  as  the  best  means  for 
securing  Federal  revenues.  They  may  have  been  mis- 
taken, and  possibly  we  are  wiser  than  they  were. 

But  it  has  proved  reasonably  satisfactory  for  over  a hun- 
dred years,  producing  ample  revenues  for  the  national 
necessities,  except  during  the  crisis  of  war,  and  no  political 
party  has  ventured  openly  to  declare  for  its  total  abandon- 
ment, and  to  propose  direct  taxes  in  place  thereof.  It  an- 
swers a twofold  purpose,  to  wit:  First,  the  direct  or  prin- 
cipal purpose  of  providing  revenue;  second,  the  indirect 
or  incidental  purpose  of  protecting  home  producers,  man- 
ufacturers, and  laborers  from  ruinous  foreign  competition. 

Revenue  is  the  primary  object  of  a tariff,  and  all  else  is 
merely  secondary,  or  incidental  thereto. 

I do  not  propose  at  this  time  to  discuss  the  difference  or 
the  merits  of  the  two  policies  arising  out  of  the  tariff  ques- 
tion, to  wit : a tariff  for  revenue  and  a tariff  for  protection, 
the  one  the  Democratic  and  the  other  the  Republican 
policy.  These  points  of  dispute  I am  not  now  consider- 
ing, but  expect  to  do  so  at  a future  day. 

The  point  which  I am  now  endeavoring  to  make  is,  that 
under  tariff  taxation  in  general  ample  revenues  have  not 
only  been  derived,  but  at  the  same  time  the  industries  of 
the  country  have  augmented,  manufactures  have  pros- 
pered, working-men  have  found  remunerative  employment, 
labor  has  been  properly  shielded  from  foreign  competition, 
and  the  best  and  highest  interests  of  the  whole  country 


30  DAVID  B.  HILl/s  GREAT  SPEECH. 

have  been  subserved;  many  of  which  beneficient  results 
would  have  been  impossible  under  any  system  of  internal 
or  direct  taxation. 

In  fact,  I am  here  to  declare  my  belief  that  the  com- 
plete substitution  of  internal,  direct,  or  income  taxes  for 
tariff  taxes  would  prove  utterly  ruinous  to  the  business  in- 
terests of  this  country  under  existing  conditions  abroad. 
A partial  substitution  at  this  time  would  be  proportionate- 
ly disastrous. 

This  bill  proposes  a suicidal  policy  when  it  seeks  by  its 
extreme  provisions  to  discard  numerous  reasonable  tariff 
duties,  and  thereby  imperil  many  industries  and  create  a 
deficiency  in  necessary  revenues,  simply  for  the  purpose  of 
affording  an  opportunity  or  excuse  for  the  substitution  of 
an  income  tax.  There  is  an  ample  field  for  genuine  tariff 
reform  without  a resort  to  such  an  unwise  and  dangerous 
experiment.  Innumerable  reductions  in  existing  rates — 
reasonable  and  necessary  reductions — are  perfectly  feasi- 
ble, such  as  will  not  create  any  further  deficiency  nor  jeop- 
ard a single  industry. 

WHAT  IT  MEANS. 

The  substitution  of  internal  or  direct  taxes  for  Custom 
House  taxation  means  the  reduction  of  the  wages  of 
American  workmen  to  the  European  standards.  It  means 
the  degradation  of  American  labor;  it  means  the  depriva- 
tion to  our  workmen  of  the  comforts  and  luxuries  of  life  to 
which  they  have  been  accustomed. 

Deny  it  or  disguise  it  as  we  may,  no  other  result  is  pos- 
sible under  existing  European  conditions.  It  is  a self-evi- 
dent proposition  that  well-paid  labor  can  not  successfully 
compete  with  underpaid  labor.  In  Europe,  wages  are  low 
and  labor  is  degraded;  in  America,  wages  are  high  and 
labor  is  prosperous,  elevated,  and  dignified.  The  general 
Government  being  vested  with  the  exclusive  power  of 
Custom  House  taxation,  and  the  States  being  prohibited 


DAVID  B.  HILl/S  GKEAT  SPEECH.  31 

from  resorting  to  it,  the  Government  should  exhaust  that 
field  before  intrenching  upon  others. 

Let  me  not  be  misunderstood.  Not  one  dollar  of  tariff 
taxation  should  be  imposed  except  what  is  necessary  for 
the  needs  of  the  Government,  economically  administered; 
but  whatever  those  needs  are,  the  necessary  revenues 
therefor  should  be  supplied  from  tariff  taxation,  and  that 
alone,  save  and  except  the  taxes  upon  liquors,  oleomar- 
garine, and  tobacco,  to  which  the  country  has  long  been 
accustomed,  and  which,  for  obvious  reasons,  need  not  be 
disturbed. 

Such  a policy  is  a reasonably  consistent  one,  and  should 
be  continued.  It  would  be  manifestly  unfair  to  the  States 
to  diversify  Federal  taxation.  It  is  now  condensed,  sim- 
plified, and  practically  exclusive,  and  should  remain  so. 

IT  DUPLICATES  TAXATION. 

A Federal  income  tax  involves  multiple  taxation  in 
several  States  where  State  income  taxes  already  exist. 
This  bill  also  proposes  to  tax  the  dividends  of  corporations 
and  gifts  and  inheritances  which  are  now  taxed  under 
State  laws  in  New  York  and  many  other  States,  thereby 
compelling  such  States  to  either  abandon  such  former 
taxation  altogether,  or  to  enforce  and  sanction  what  would 
clearly  be  oppressive  taxation.  The  duplication  of  taxes 
is  always  objectionable. 

The  threadbare  argument  is  urged  that  wealth  escapes 
taxation,  and  that  it  can  best  be  reached  through  an  in- 
come* tax.  If  this  be  true,  it  does  not  necessarily  require 
a Federal  income  tax.  Let  those  States  where  wealth  is 
believed  to  be  insufficiently  taxed  reach  that  wealth 
through  State  income  taxes  or  any  other  methods  which" 
their  ingenuity  can  suggest,  and  no  one  outside  of  those 
States  will  be  heard  to  object.  Surely,  States  which  re- 
fuse to  apply  the  means  within  their  power  to  equalize, 
diminish,  or  render  more  equitable  their  own  State  and 


32  DAVID  B.  HILDAS  "GREAT  SPEECH. 

local  taxation,  ought  not  to  ask  the  assistance  of  the  gen- 
eral Government  to  relieve  them. 

State  and  local  taxation,  rather  than  Federal  taxation, 
comprises  the  principal  burden  of  our  taxpayers,  and  to 
each  State  is  conceded  the  right  to  frame  and  execute  its 
own  tax  laws,  whereby  it  ,can  compel  the  wealth  within  its 
own  borders  to  contribute  whatever  share  of  taxation  it 
may  determine  in  its  discretion  to  be  proper. 

This  is  all  that  any  State  can  reasonably  ask.  Certain- 
ly no  State  can  consistently  demand  that  its  own  preroga- 
tives shall  be  encroached  upon  and  its  own  revenues  im- 
periled by  the  general  Government  in  order  that  the 
State’s  own  wealth  may  not  escape  taxation. 

FEDERAL  VERSUS  STATE  AND  LOCAL  TAXATION. 

The  records  of  the  Census  Bureau  show  that  in  1890 
the  State,  county,  and  local  taxation  of  the  several  States 
of  the  Union  amounted  in  the  aggregate  to  $470,476,927. 
The  total  Federal  taxation  (ordinary  expenditures)  for  the 
last  completed  fiscal  year  (1893)  only  amounted  to  $383,- 
477,954.49,  and  including  extraordinary  expenditures, 
amounted  to  $461,916,561.94.  Of  this  last  sum  only 
$205,355,016.73  were  realized  from  customs.  It  is  the 
Custom  House  taxation  particularly  which  the  friends  of 
direct  Federal  taxation  claim  is  not  paid  equally  by  the 
people,  and  is  so  burdensome  to  the  poor  man,  and  yet 
such  taxation  is  not  equal  to  one  half  of  the  State  and 
local  taxation. 

WHAT  STATES  WILL  PAY  THE  TAX. 

From  1863  to  1873  the  former  income  tax  extorted  from 
the  people  an  aggregate  sum  of  $347,220,897.86.  Of  this 
sum  the  Eastern  States  paid  eighteen  per  cent.,  the  Mid- 
dle States  fifty-three  per  cent.,  and  together  they  paid 
seventy-one  per  cent.  New  York  alone  paid  thirty  per 
cent.  It  has  not  been  claimed  that  these  percentages  will 
be  materially  changed  if  this  bill  becomes  a law. 


DAVID  13.  HILL'S  GREAT  SPEECH. 


33 


These  figures  speak  louder  than  words.  They  are  sig- 
nificant of  the  selfish  purposes  of  this  bill,  the  real  motives 
behind  it,  and  the  source  or  section  from  which  the  votes 
necessary  for  its  passage  are  expected  to  be  secured. 

Further  comment  becomes  unnecessary.  I will  add 
that  1 am  not  ashamed  of  the  fact— on  the  contrary,  I am 
proud  of  the  fact — that  New  York  is  the  wealthiest  State 
in  our  Union;  but  I protest  that  this  circumstance  should 
not  make  her  citizens  the  target  of  every  vicious  scheme 
which  discriminates  against  her  interests,  and  especially 
that  the  blows  should  not  be  struck  by  those  political 
friends  who  have  never  appealed  to  her  in  vain  when  they 
have  needed  evidences  of  her  friendship. 

A STEP  TOWARD  SOCIALISM. 

It  is  charged  against  the  friends  of  a Federal  income  tax 
that  they  are  artfully  driving  in  the  thin  edge  of  a wedge 
to  effect  a forced  redistribution  of  property. 

Toward  such  a purpose,  were  it  fixed  in  the  minds  of  a 
majority  of  the  voters,  the  efficiency  of  every  kind  of  an 
income  tax  is  undeniable,  whether  applied  in  State  laws  to 
the  profit  of  classes,  or  in  a Federal  law  to  the  profit  of 
sections. 

I feel  bound  to  concede  that  the  sincere  object  of  the 
great  body  of  the  friends  of  a Federal  tax  on  incomes  is 
not  an  experiment  in  socialism,  is  not  a swift  political 
suicide,  but  is  the  straightforward  furtherance,  after  great 
discouragement  and  long  delay — the  furtherance  of  tariff 
reform. 

The  choice  of  a pivot  for  tariff  reform  in  this  bill  re- 
sponds to  the  firm  tenacity  of  the  people  for  relief,  but  not 
wisely.  The  choice  follows,  to  be  sure,  a notable  British 
precedent,  but  that  precedent  is  quite  irrelevant  for 
America,  where  Federal  and  State  taxes  present  no 
analogy  to  the  foreign  agglomeration  of  imperial  and 
local  taxation. 


34  DAVID  B.  HILI/S  GREAT  SPEECH. 

The  British  kingdom  is  straining  to-day  in  the  pangs  of 
decentralization.  A Federal  income  tax  would  lay  in  the 
United  States  the  great  corner-stone  of  future  centraliza- 
tion. The  choice  of  some  pivot  of  tariff  reform  in  the 
United  States — that  is,  obtaining  revenue  from  one  source 
in  order  to  discard  revenue  from  another  source — is  a 
necessity.'  What  pivot  had  best  be  chosen  is  pure  expedi- 
ency. The  British  choice  may  have  been  expedient  in 
Great  Britain.  An  identical  or  different  choice  in  the 
United  States  needs  to  be  shown  expedient  here.  Alone 
serving  the  purpose,  or  best  serving  the  purpose,  of  a 
pivot  for  tariff  reform,  must  be  the  test  of  expediency  for 
an  income  tax  in  the  United  States,  even  by  those  who 
deem  it  an  inoffensive  and  lawful  Federal  law. 

It  is  obviously  inexpedient,  if  unnecessary.  Evidence 
that  it  is  unnecessary  for  the  purpose  of  its  friends  has- 
been,  and  is  now,  offered  to  their  consideration. 

THE  ENGLISH  PRECEDENT. 

Praises  of  an  income  tax  which  are  quoted  in  the  Con- 
gressional Record  from  British  books  will  be  found  upon 
inspection  to  be  relative  to  the  demerits  of  the  discarded 
taxes.  Mr.  Gladstone  himself  desired  to  renounce  the  in- 
come tax  after  it  had  served  its  term,  conceding  thus  its 
injustice  and  inequality. 

I do  not  misstate  his  position.  The  following  letter, 
written  by  him  in  1892  to  a London  newspaper,  explains 
itself: 

Gladstone's  opinion  of  the  income  tax. 

From  the  London  Pall  Mall  Gazette . 

I am  not  aware  of  any  practicable  method  of  reforming 
the  inequalities  and  injustices  of  the  income  tax.  For 
this  reason,  I,  with  my  colleagues,  proposed  its  abolition 
in  1874;  but  the  country  decided  otherwise. 

January,  1892.  ' W.  E,  Gladstone, 


DAVID  B.  HILI/S  GREAT  SPEECH. 


35 


That  statesman’s  act  praises  good  tariff  taxation  over 
bad  tariff  taxation,  and  over  income  taxation,  too.  The 
United  States  can  find,  upon  reflection,  a better  pivot  of 
tariff  reform,  and  one  which  will  not  need  to  be  renounced 
for  its  own  demerits.  Praises  of  an  income  tax  and  theo- 
retical arguments  for  it,  quoted  in  the  Record  from  the 
British  treatises  of  political  economy,  will  be  found  to  rest 
on  the  assumption  that  it  be  the  sole  and  single  tax — that 
it  be  the  exclusive  means  of  defraying  Government  ex- 
pense, from  the  highest  imperial  to  the  lowest  police 
functions,  and  that  it  tolerate  no  exemptions. 

All  such  quoted  arguments  are  obviously  irrelevant 
here.  No  British  statesman  of  rank,  so  far  as  I know, 
differs  from  Mr.  Gladstone’s  opinion  that,  as  a supple- 
mentary tax,  the  income  tax  in  Great  Britain,  where,  upon 
constitutional  grounds  it  is  eligible,  is  as  indefensible  as 
it  is  odious  in  time  of  peace,  and  that  there  it  must  find  its 
only  warrant  in  the  necessities  of  war. 

No  American  statesman  of  rank,  except  Mr.  Cleveland, 
has  deemed  it  eligible,  since  our  war  experience  of  an  in- 
come tax  made  manifest  that  here,  too,  in  the  Northern 
States,  it  was  generally  odious.  It  is  a novelty  in  Ameri- 
can politics  to  make  its  conclusions  and  procedures  delib- 
erately offensive.  It  is  like  making  religion  immoral,  and 
urbanity  noisy,  in  order  to  command  and  propagate  them. 

IT  VIOLATES  STATE  RIGHTS. 

No  such  Federal  aggrandizement  was  ever  projected — 
ho  such  insidious  and  deadly  assault  upon  State  rights. 
State  powers,  and  State  independenoe,  as  a Federal  in- 
come tax. 

Mr.  Calhoun  would  have  thought  it  wasted  breath  to 
discuss  the  autonomy  of  States  or  the  limits  of  their  sover- 
eignty under  an  income  tax  put  up  and  put  down  by  the 
Congress  in  Washington. 

Praises  of  an  income  tax  on  the  ground  that  it  reaches 


36,  DAVID  B.  HILl/s  GREAT  SPEECH. 

accumulated  wealth,  assumes  that  such  wealth  goes  un- 
taxed unless  reached  by  Federal  laws.  The  assumption  is 
absurd. 

Arguments  for  a Federal  income  tax  drawn  from  the 
existence  of  State  taxes  on  incomes,  admit  that  accumu- 
lated wealth  is  reached  without  Federal  laws,  and  confess 
encroachment  upon  State  sources  of  revenue. 

Accumulated  wealth  looms  up  large  in  the  imagination 
of  the  foreign  Socialist.  His  estimate  of  individual  fort- 
unes, published  in  New  York  newspapers,  is  always  ab- 
surdly excessive.  His  moral  quality  is  frankly  betrayed  in 
his  constant  preoccupation  with  the  least  noble  possession 
of  his  fellow-creatures. 

A better  point  of  view  for  the  American  legislator  is  the 
fact  that  the  total  realized  material  wealth  of  the  human 
race  is  computed  by  the  best  economists  at  less  than  four 
times  its  annual  consumption.  Every  step  of  progress  de- 
stroys wealth  to  recreate  more.  Old  printing  presses,  old 
cotton-mill  machines  are  worthless. 

The  constant  personal  redistribution  of  realized  accumu- 
lated wealth  is  a commonplace  of  the  moralists.  But  its 
physical  and  economical  redistribution  is  even  more  swift 
and  general.  It  can  not  escape  taxation  in  the  ceaseless 
consumption  and  reproduction  which  are  the  condition  of 
its  continuing  to  be  wealth. 

THE  HOUSE  ARGUMENTS. 

To  these  income-tax  arguments,  sifted  from  the  debate 
in  the  House,  I pay  the  respect  of  refutation,  because  of 
my  entire  sympathy  with  the  tenacious  purpose  to  advance 
tax  reform,  which  is  ostensibly  behind  them.  But  I must 
also  beg  permission  very  respectfully  to  warn  the  devoted 
champions  of  every  Democratic  aspiration  not  to  neglect 
principles  constitutional  and  economic  which  are  deep- 
seated  in  the  life-long  convictions  of  Northern  Democrats, 
merely  because  of  the  omissions  of  the  present  Executive 


DAVID  B.  HILl/s  GREAT  SPEECH. 


37 


to  wholly  share,  remember,  or  represent  them.  No  nonest 
and  clear-headed  man  can  possibly  define  a direct  tax  in 
terms  which  shall  be  capable  to  exclude  any  sort  of  income 
tax  from  the  circumscription  of  the  definition. 

Nobody  ever  had  a doubt  before  the  war  that  the  con- 
stitutional inhibition  upon  that  ground  alone  was  per- 
emptory and  conclusive.  I do  not  quarrel  with  the  de- 
cision of  the  Supreme  Court  in  the  Springer  case,  but  the 
doctrine  may  hereafter  be  repudiated  by  the  present  court. 
Such  things  have  happened  before. 

The  income  tax  proposed  by  the  President,  or  that  in- 
corporated in  the  House  bill,  or  any  other  sort  of  Federal 
income  tax,  is  unsuitable  for  apportionment  among  the 
several  States  according  to  the  census  of  their  populations, 
and  neither  pretends  to  be  uniform,  applied  to  all  the 
net  income  of  each  and  every  citizen,  nor  can  be.  Direct 
taxation,  by  definition,  making  argument  superfluous,  is  a 
taxation  not  shifted,  distributed,  and  divided  by  reper- 
cussion. 

A single  tax  on  land  has  enlightened  advocates-  on  the 
ground  that  it  would  be  distributed,  divided,  and  reper- 
cussed with  freedom  and  therefore  with  equity;  that  being 
advanced  by  the  occupier  of  the  land,  it  would  be  dis- 
tributed according  to  the  use  of  the  land,  which  use  is 
variable  while  universal — thus  resembling  in  this  point  a 
tax  on  sugar,  for  example,  which  being  advanced  by  the 
importer,  would  be  distributed  according  to  consumption 
— another  form  of  use,  variable  while  universal. 

Direct  taxation,  on  the  other  hand,  of  which  the  poll- 
tax  and  the  tax  on  all  incomes  at  one  percentage,  are  per- 
fect illustrations,  is  like  an  acid  which  must  eat  where  it 
falls. 


x 


Arguments  for  an  income  tax  assert,  moreover,  that 
Congress  is  empowered  to  apply  a rule  of  inequality  and  a 
principle  of  injustice  in  order  to  distribute  the  rewards  of 
industry  and  thrift  otherwise  than  they  are  distributed 


38  DAVID  B.  HILDAS  GREAT  SPEECH. 

among  men  acting  with  individual  freedom  under  equal 
laws.  Such  a grant  of  power  to  Congress  has  not  yet  been 
cited.  But  if  such  a grant  of  power,  after  long  litigation, 
were  found  there,  or  after  the  long  process  of  constitu- 
tional amendments  were  put  there,'  nevertheless  the  test 
first  to  be  applied  just  now  in  the  search  for  sources  of 
revenue  would  preclude  income  taxation. 

It  is  not  the  most  immediate  and  most  adequate  remedy 
for  the  existing  lack  of  revenues,  and  would*  not  aid  the 
revival  of  our  prostrate  industries.  It  is  not  the  best 
pivot  of  tariff  reform.  It  jeopards  genuine  tariff  reform 
for  another  decade. 

AN  UNWISE  COURSE. 

To  double  the  deficit  of  $78,000,000  by  way  of  ending 
it;  to  discard  the  $76,000,000  of  annqal  revenue  in  order 
to  collect  twice  as  much  in  other  ways;  to  “ embody  tariff 
reform,”  as  the  President  imagined  himself  to  be  doing  in 
his  scheme  to  substitute  direct  taxes  for  the  tariff  taxes  which 
were  to  be  reformed;  to  reconstruct  all  the  schedules  instead 
of  amending  or  discarding  one  group  at  a time,  the  worst 
first,  and  each  upon  its  own  demerits;  to  disturb  and  dis- 
tress as  many  business  men  as  possible,  and  all  at  once, 
instead  of  a few  at  a time,  is  not  a programme  perfectly 
matured  and  suited  to  conduct  the  policy  and  principle  of 
tariff  reform  unimpaired  through  a period  of  general  busi- 
ness prostration,  public  deficit,  and  private  bankruptcy. 

For  my  own  part,  as  a Democrat,  I prefer  indirect  taxa- 
tion and  tariff  reform  above  direct  taxes  and  tariff  extinc- 
tion. I prefer  taxing  foreign  products  rather  than  taxing 
home  products.  I follow  Jefferson  in  regarding  even  the 
species  of  indirect  taxation  on  home  products  by  internal 
revenue  war  taxes  as  not  good  to  be  extended,  and  the  first 
to  be  rid  of  when  their  need  is  past. 

In  the  language  of  the  Democratic  national  platform  of 
1884: 


DAVID  B.  HILl/S  GREAT  SPEECH. 


39 


From  the  foundation  of  this  Government  taxes  collected 
at  the  Custom  House  have  been  the  chief  source  of  Fed- 
eral revenue.  Such  they  must  continue  to  be. 

In  the  language  of  the  New  York  Chamber  of  Com- 
merce, January  12,  1894: 

The  Chamber  of  Commerce  * * * believe  without 

distinction  of  party  lines  * * * that  in  addition  to  an 

internal  revenue  tax  now  in  force,  the  necessary  expenses 
of  the  Government  should  be  collected  through  the  Custom 
House. 

The  President’s  proposal  to  invert  the  method  of  our 
Federal  taxation  runs  precisely  counter  to  the  principle  and 
the  practice  preferred  by  the  founders  of  our  Republic,  and 
to  which,  after  every  aberration,  the  apostles  of  Democracy 
have  led  the  return.  But  were  all  this  otherwise,  never- 
theless, I would  first  and  foremost  consider  how  to  add' 
sufficient  revenue  best  and  soonest. 

I would  remember  the  captains  of  industry;  I would 
remember  the  breadwinners.  And  if  our  Federal  revenues, 
bottomed  heretofore  upon  customs  duties  on  foreign  prod- 
ucts, were  hereafter  to  be  bottomed  upon  taxes  on  home 
products,  and  a few  incomes,  I could  never  counsel  a 
President  or  a Congress  to  sound  the  tocsin  of  that  revolu- 
tion in  the  black  midnight  following  a general  slaughter 
day  of  all  private  incomes. 

THE  FOREIGN  PRECEDENTS. 

The  State  Department,  through  our  Consuls  in  Europe, 
has  made  a collection  of  income-tax  laws — every  hideous 
octopus  that  is  sucking  out  the  life  blood  of  the  people  of 
Europe  to  support  war  navies  and  war  armies — and  fetches 
them  over  for  model  examples  to  this  land  of  liberty,  this 
continent  of  industrial  peace.  Fit  models,  fine  examples! 
They  have  taught  the  draftsmen  of  this  bill  one  lesson  too 
many.  They  have  taught  the  draftsmen  of  this  bill  with 
just  what  form  of  words  to  constitute  a class  of  official 


40  DAVID  B.  HILL'S  GREAT  SPEECH. 

highwaymen  for  blackmailing  or  plundering  every  man  of 
jiroperty  in  the  United  States.  Is  that  harsh?  Then 
I say  that  were  the  teachers  angels,  and  the  pupils  better 
than  the  best  of  men,  no  form  of  words  their  wit  could 
contrive  would  fail  of  spawning  just  that  infamy.  It  is 
inherent,  intrinsic;  it  sticks  in  the  very  nature  of  any  Fed- 
eral income-tax  law  whatever. 

Jefferson’s  sentiments. 

Jefferson’s  Fontainebleau  letter  has  been  quoted  in  this 
discussion.  That  letter  was  written  on  the  eve  of  the 
French  revolution.  It  was  written  in  the  presence  of  those 
awful  social  wrongs  and  the  political  inequality,  injustice, 
and  oppression  from  which  that  historic  convulsion  ensued. 
It  is  actually  quoted  as  helpful  authority  by  men  favoring 
an  income  tax,  in  a century,  a hemisphere,  and  a State 
where  exists  not  one  of  all  the  affecting  circumstances  that 
Jefferson’s  kind  heart  grieved  over,  and  his  philosophic 
mind  scanned  all  the  darkening  sky  for  peaceful  methods 
to  relieve. 

The  Fontainebleau  letter  reveals  him  anew  in  those 
powerful  yet  winning  traits  which  make  his  life  and  char- 
acter the  admiration  of  every  American.  - Indeed,  the  most 
impressive  argument  against  an  American  income  tax  is 
foreshadowed  from  his  thrilling  page.  It  is  a fit  “ pro- 
logue to  the  swelling  act  of  the  imperial  theme”  of  the 
great  inaugural  address. 

OUR  AMERICAN  PRINCIPLES  OF  GOVERNMENT. 

The  United  States  of  America  have  hitherto  received, 
and  are  now  receiving  from  the  best  races  of  other  States, 
nations,  and  empires,  the  tribute  of  a surpassing  praise 
without  jirecedent  in  history — the  praise  of  the  desire  of 
their  young  men  and  young  women  to  assimilate  their  lives 
to  ours,  and  their  children’s  blood  with  the  blood  of  our 
children;  the  praise  of  their  desire  to  escape  the  burdens 
of  past  and  future  wars  and  be  at  peace;  the  praise  of  their 


DAVID  B.  HILL'S  GKEAT  „ SPEECH.  41 

desire  to  escape  from  the  inequalities  of  privilege  to  an 
equality  of  rights;  from  European  thrones,  dominations, 
hierarchies,  classes,  and  castes,  political,  ecclestiastical,  or 
social,  to  an  American  individual  liberty  and  civil 
equality,  to  our  forms  of  Government,  founded  upon 
popular  elections,  expressed  in  written  constitutions,  em- 
bodied in  a permanent  union  of  permanent  States. 

It  may  be  impracticable  that  our  distinctively  American 
experiment  of  individual  freedom  should  go  on.  Its 
novelty,  as  known  by  experience  to  the  earlier  emigra- 
tion, can  hardly  be  expected  to  receive  full  appreciation 
even  from  the  most  intelligent  immigrants  of  the  present 
generation.  Our  separation  from  the  traditions  and  habits 
of  thought  of  the  Old  World  was  so  complete  that  the 
Declaration  of  Independence  ratified  an  old  fact  rather 
than,  accomplished  a new  fact.  The  Constitution  of  the 
United  States  confirmed  us  in  the  possession  of  that  inde- 
pendent tradition  and  a complete  individual  freedom. 

The  States  which  it  united,  the  Federal  Government 
which  it  established,  are  chiefly  remarkable  for  their  inhi- 
bitions of  power,  for  their  limitation  of  granted  powers, 
for  the  strength  and  multiplicity  of  their  safeguards  of  in- 
dividual freedom.  The  sovereignty  of  the  people,  incon- 
testible,  possessed,  fresh  like  the  dew  of  morning  in  the 
beginning  of  our  day,  and  not  like  the  dust  and  sweat  of 
centuries  of  strife,  was  here  first  asserted  and  made  mani- 
fest throughout  the  whole  , area  of  its  jurisdiction,  in  its 
reservations  and  self-denials,  in  those  limits  set  to  its  con- 
trol, in  those  fortified  safeguards  of  civil  equality  and  indi- 
vidual liberty  o 

Perhaps  it  is  a dream  that  such  a paradise  as  we  have 
possessed  could  be  secure  from  change.  The  pick  of  the 
foremost  races  of  mankind  still  are  streaming  hither,  but 
now  they  bring  another  tradition.  They  come  from  that 
group  of  crowded,  contiguous  armed  camps  called  Europe. 
They  have  not  had  training  for  generations  in  self -govern- 


42 


DAYID  B.  HILLjS  GREAT  SPEECH. 


ment.  Some  few  have  had  a little  training  in  getting 
possession  of  large  governmental  powers,  existing  and  long 
used  in  disregard  of  popular  rights.  They  have  not  had 
the  habitude  of  popular  sovereignty  uncontested,  popular 
rights  enjoyed  like  air  and  water;  they  have  not  lived  in 
civil  equality  and  individual  liberty  like  ours,  guarded 
with  eternal  vigilance  against  the  very  governments  our 
fathers5  hands  and  our  own  have  made,  and  put  bounds  to, 
and  unweariedly  repressed. 

Across  the  water,  among  European  peoples,  human  free- 
dom enlarges,  if  it  is  enlarging,  slowly.  Out  of  armed 
camps  not  yet  has  grown  a civil  polity  which  refuses  powers 
to  the  State  in  order  to  guard  freedom  for  the  man.  State 
powers  grow.  If  individual  freedom  anywhere  is  broad- 
ening there,  its  growth  is  subject  to  an  inheritance  from 
which  we  completely,  at  one  stroke,  escaped,  and  to  haz- 
ards hitherto  unknown  by  us.  The  growth  of  human  free- 
dom in  Europe  is  subject  to  hazards  from  extensive, 
minute,  searching,  inquisitorial  governmental  powers,  ex- 
isting, organized,  and  predominant. 

It  is  that  sort  of  an  inheritance,  not  our  New  World  sort, 
which  the  peoples  of  Europe  are  called  to  administer,  as 
one  by  one,  after  long  wrestling  with  intermarried 
dynasties,  through  wars  and  revolutions,  they  succeed  to 
the  substance  of  sovereignty.  Interferences  with  indi- 
vidual freedom  are  customary,  and  breed  their  own  tradi- 
tion. The  Governments  are  of  militant  and  not  industrial 
pattern.  Their  machinery  is  organized  for  repressioh;  has 
had  interference  and  control  for  means  and  ends.  That 
which  was  and  is  the  interest  of  monarchies  and  aristo- 
cracies, in  becoming  the  inheritance  becomes  the  tempta- 
tion and  the  hazard  of  their  democracies. 

THE  WEAPON  OF  MONARCHIES. 

Taxation  of  all  sorts,  taxation  at  every  turn,  taxations 
upon  incomes,  with  all  the  necessary  bureaucracy,  ma- 


DAVID  B.  HILL'S  GREAT  SPEECH.  43 

chinery,  and  inquisition,  has  long  been  the  appropriate  and 
most  perfected  instrument  with  which  European  govern- 
ments have  multiplied  their  functions  and  prolonged  their 
supervision,  their  control,  their  repression  of  the  people's 
doings.  While  the  founders  of  our  democratic  Republic, 
hiding  the  tax-gatherers  in  a few  seaboard  Custom  Houses, 
bid  them  remember  they  were  the  people's  servants,  and 
stick  to  an  inoffensive  obscurity,  the  tax-gatherers  of  Europe 
become  a fat  official  class,  leaders  of  the  local  society, 
parasites,  pupils,  and  servants  to  every  occupant  of  a 
throne. 

The  leaders  of  the  democracies  who  are  approaching 
sovereignty  slowly  and  clutching  for  the  handle  of  every 
power  whose  edge  they  have  felt,  dreading  the  reaction 
that  has  followed  confiscation  of  privileged  estates,  per- 
ceive, or  think  they  see,  in  the  taxation  of  incomes  a safer 
and  attractive  weapon  of  redress.  Instead  of  the  settled 
supremacy  here  of  man  versus  the  State,  there  we  see  sur- 
vivals of  an  earlier,  almost  a barbaric  phase  of  human 
progress,  and  the  war  of  a class — the  poor  and  the  un- 
privileged— to  capture  the  State  in  order  to  make  reprisals 
upon  another  class,  the  privileged  and  the  rich. 

Taxation  is  even  the  favorite  organ  of  more  advanced 
Europeans  who  would  bottle  into  the  political  and  cor- 
porate structures  of  society  those  innumerable,  limitless 
fountains  of  social  beneficence  which  here  have  found  their 
widest,  deepest  flow  through  free  lives  from  the  free  hearts 
of  free  men. 

So  it  happens  that  local  troubles  find  a passing  phase  of 
the  secular  progress  of  democracy  in  the  Old  World  take 
on  the  aspect  of  socialism,  whereas  in  this  new  world  of 
the  United  States  our  democracy  has  always  been  freedom. 

OUR  EUROPEAN  ADVISERS. 

The  non-migrating  European  feels  a parental  superiority 
and  duty  toward  us. 


44  DAVID  B.  HILL'S  GREAT  SPEECH. 

European  professors  announce  to  American  professors, 
who  publish  and  believe  it,  the  birth  of  a brand-new 
political  economy  for  universal  application.  From  the 
midst  of  their  armed  camps  between  the  Danube  and  the 
Rhine,  the  professors  with  their  books,  the  Socialists  with 
their  schemes,  the  Anarchists  with  their  bombs,  are  all  in- 
structing the  people  of  the  United  States  in  the  organiza- 
tion of  society,  the  doctrines  of  democracy,  and  the  prin- 
ciples of  taxation.  Little  squads  of  Anarchists,  Com- 
munists, and  Socialists  cross  the  ocean  and  would  have  us 
learn  of  them.  No  wonder,  if  their  preaching  can  find 
ears  in  the  White  House. 

An  editor  residing  in  Europe,  of  Hungarian  birth,  in  his 
New  York  newspaper  advocates  an  income  tax  designed 
ultimately  to  put  upon  nine  States  between  Cape  Cod  and 
the  Mississippi  seventy-seven  per  cent.,  and  upon  New 
York  alone  thirty  per  cent,  of  the  expenses  of  the  Federal 
Government. 

That  taxation  of  incomes  in  the  United  States  would  be 
sectional,  and  class  taxation  is  precisely  why  it  commends 
itself  to  some  men  of  the  European  tradition.  Their 
advocacy  is  sincere,  and  has  one  small  excuse,  that  through 
our  own  stupidity  and  negligence  some  parts  of  our  tariff 
schedules  have  been  shaped  to  enrich  a few  Carnegies  with 
texts  for  sermons  on  triumphant  democracy  and  the  best 
use  of  wealth. 

If  McKinleyism  is  socialism  for  the  benefit  of  the  rich, 
and  income  taxing  is  socialism  for  the  benefit  of  the  poor, 
no  true  American  Democrat  will  look  to  the  hair  of  the 
dog  to  cure  his  bite.  American  Democrats  will  reject 
socialism  of  both  kinds. 

THE  AGGRANDIZEMENT  OF  GOVERNMENTS. 

It  is  not  to  be  overlooked,  moreover,  that  the  chief  cost 
of  our  war  of  secession  is  accruing  now,  not  so  much  in  the 
pension  list  as  in  the  usual  war  expansions  and  war 


DAVID  B.  HILL'S  GREAT  SPEECH.  45 

aggrandizements  of  governmental  power  first  usurped  in 
the  name  of  patriotic  necessity,  defended  in  the  un- 
righteous decisions  of  courts,  unrenounced  by  Congress, 
and  tolerated  because  customary  by  the  people. 

Yet,  if  all  the  expense  of  the  Federal  Government  could 
be  assessed  upon  the  income  of  two  hundred  and  fifty 
multi-millionaires  who  would  never  know  the  difference,, 
and  if  all  their  fortunes  had  been  acquired  otherwise  than 
by  free  competition  under  equal  laws,  there  could  be  no 
compensation  for  wrecking  our  American  experiment  of 
individual  freedom  by  giving  to  the  officers  and  tax-gatherers 
of  the  Federal  Government  contact  with  the  contracts, 
business,  or  property  of  individuals  within  the  States. 

In  the  official  class  our  fathers  saw  the  natural  magni- 
fiers of  Government  and  expanders  of  its  functional  areas. 
They  eschewed  its  systematic  domination  and  espionage. 
They  gave  the  Federal  tax-gatherers  no  mission  to  draw  up 
all  things  to  a central  head  at  this  capital.  They  virtually 
dissolved  that  Old  World  institution,  the  standing  army  of 
tithe-takers.  They  eschewed  direct  taxes  to  punish  thrift 
and  penalize  prosperity.  They  derived  the  revenues  of  the 
Federal  Government  from  taxes  levied  at  the  seaboard 
upon  things  of  foreign  origin  brought  for  consumption 
here.  Thus  avoiding  every  risk  of  duplicated,  or  overlap- 
ping taxation,  they  left  to  the  undiminished  State,  city, 
county,  neighborhood,  authority,  also  undiminished  all  the 
great  sources  of  revenue. 

Europeanizing  this  America,  the  lovely  cynosure  of 
nations,  would  soon  make  it  worth  no  man's  while  to  climb 
the  sea-wall  of  our  paradise.  Its  natural,  almost  unavoid- 
able invasion  by  foreign  traditions,  unfamiliar  to  our  vital 
air  of  perfect  liberty,  is  already  great,  continuous,  increas- 
ing. While  we  welcome  the  immigrant,  let  us  keep  safe 
the  inestimable,  though  unvalued,  jewel  of  our  great  State. 
If  we  owe  that  which  is  unique  in  oui*  American  freedom 
to  that  which  is  unique  in  the  partition,  the  limitation,  the 


46  DAVID  B.  HILI/S  GREAT  SPEECH. 

inhibition  of  Government  powers,,  let  us  now  stand  fast 
for  the  confines  of  that  sovereignty  “ within  whose  circuit 
is  Elysium.” 

THE  PRACTICAL  QUESTIONS. 

The  House  bill  created  a deficiency  in  the  revenues 
necessary  for  the  Government. 

It  then  became  the  duty  of  the  Senate  Finance  Com- 
mittee to  supply  that  deficiency,  which  they  proceeded  to 
discharge.  What  were  the  questions  which  presented 
themselves  to  that  committee  at  the  outset  of  their  endeav- 
ors, and  which  now  confront  the  Senate  in  its  final  action? 

I conceive  them  to  be  these: 

What  imported  articles,  if  tariffed,  will  best  and  soonest 
end  the  growing  Treasury  deficit,  and  so  remove  a chief 
hinderance  to  the  release  of  capital  and  employment  of  labor? 
Can  one  or  more  be  found  from  which  revenue  will  be  im- 
mediate, continuous,  sufficient,  of  unquestioned  legality,  so 
as  not  to  be  delayed  by  years  of  strife  in  the  courts,  of  use 
and  distribution  universal,  if  possible,  so  that  the  burden 
may  be  least  felt?  Can  the  revenue  therefrom  be  collected 
in  the  lump  at  the  seaboard,  and  final  payment  made  by 
66,000,000  consumers  at  the  most  convenient  time  and 
way,  namely,  just  before  consumption  in  a small  addition 
to  its  price? 

Can  the  whole  addition  to  the  price  of  the  tariffed 
article  beyond  its  price  if  not  tariffed,  being  all  the  tax,  go 
to  the  Federal  Treasury,  without  abatement,  stop  the 
growing  deficit,  and  release  the  deadlock  of  our  industrial 
energies?  I would  hazard  no  steps  in  the  mere  revision  of 
taxation  except  secure  and  solid  steps,  each  one  justified 
by  the  result  of  the  previous  step,  and  accompanied  every 
one  by  the  confidence  of  the  mass  of  the  people,  instead  of 
by  their  dread  and  fear.  If  my  counsels  were  heeded,  I 
would  surprise  and  satisfy  the  country  by  the  conservatism 
of  our  progress  in  revenue  reform.  The  McKinley  bill 


DAVID  B.  HILl/S  GREAT  SPEECH.  4? 

lost  the  country  to  our  opponents  by  its  extreme  features 
in  one  direction,  and  we  should  avoid  the  opposite  extreme. 

TAX  ON  CONSUMPTION. 

“ Tax  on  consumption  ” is  another  current  phrase  that 
shuts  off  light.  It  puts  blinders  on  men  and  prevents 
their  seeing  how  many  considerations  should  have  weight 
in  choosing  a tariff  tax,  and  that  if  a tax  be  a tax  on  con- 
sumption, that  is  no  reason  for  rejecting  it,  even  if  there 
were  twenty  good  reasons  for  rejecting  it  on  other  grounds. 

All  tariff  taxes,  and  ninety  hundredths  of  all  possible  in- 
ternal revenue  taxes,  are  taxes  on  consumption.  The  time 
of  consumption  varies.  An  anchor  may  take  twenty 
years — an  orange  two  minutes.  Just  as  the  correlative  of 
buying  is  selling,  just  as  the  counterpart  of  money  is  com- 
modity, so  the  correlative  of  consumption  is  production, 
and  in  each  of  these  two  correlatives  is  the  other’s  being, 
end,  and  aim.  It  is  to  consume  that  we  produce;  it  is  to 
produce  that  we  consume.  Neither  process  can  be  stayed, 
yet  a man  live,  or  a State,  or  the  race. 

Whereabouts  in  the  eternal  round  shall  we  tap  for  taxa- 
tion? 

How  plain  it  is  now,  when  a mere  phrase  no  longer  shuts 
off  vision,  that,  for  purposes  of  taxation  toward  the  public 
expense  and  general  welfare,  consumption  should  be 
tapped  and  not  production.  Increased  production  of 
whatever  is  good  and  necessary  for  consumption  is  pal- 
pably everybody’s  interest.  Other  things  being  equal, 
price  falls  as  production  increases,  making  consumption 
less  costly.  Wants  are  satisfied  by  production,  and  nobody 
can  contract  himself  out  of  everybody’s  similar  interest  in 
its  increase. 

But  there  is  no  such  universal  and  similar  interest  of 
everybody  in  anybody’s  consumption.  That  is  the  indi- 
vidual’s affair,  and  his  consumption  offers  the  least  injuri- 
ous point  of  taxation  for  him  in  every  individual  case. 


48  DAVID  B.  HILL'S  GREAT  SPEECH, 

Another  merit  of  taxes  on  consumption  is  tlpat  they  a x6  sur- 
mounted in  detail,  and  paid  at  the  will  of  the  consumer  in 
the  enhancement  of  price.  If  noted,  they  are  self-assessed, 
with  the  least  inconvenience  at  the  best  time,  in  the  smallest 
sum,  or  they  are  declined  and  avoided  without  illegality. 

If  a thing  were  homogeneous,  and  its  consumption  were 
universal,  if  its  bulk  were  considerable,  but  its  cost  small, 
such  qualities  combined  would  make  that  thing  the 
most  perfect  distributor,  through  voluntary  consumption, 
of  an  equitable  taxation.  Assuredly,  in  our  Federal  Gov- 
ernment, we  may  well  regard  a distributive  equality  as  the 
best  character  of  its  taxation,  leaving  to  State,  municipal, 
and  local  taxation  exemptions  of  burdens  which,  as  vary- 
ing from  the-general  mass  of  our  citizenship  and  property, 
or  for  reasons  apart  from  revenue,  or  for  considerations 
other  than  common  and  equal  to  all,  local  authorities  with 
local  knowledge,  and  closer  watch-care  for  any  exceptional 
purpose  may  impose. 

THE  HOUSE  VERSUS  THE  SEHATE. 

The  Finance  Committee,  in  their  effort  to  modify  the 
House  bill  so  as  to  realize  a sufficiency  rather  than  a 
deficiency  of  revenue,  selected  sugar  as  one  of  such  articles 
deemed  proper  for  tariff  taxation,  and  provided  for  a mod- 
erate duty  thereon.  I do  not  question  the  wisdom  of  their 
present  action.  But  such  conclusion  should  have  been  fol- 
lowed by  an  elimination  of  the  income  tax  rendered 
doubly  unnecessary  by  the  imposition  of  a sugar  duty. 

It  is  difficult  to  reconcile  the  House  bill  with  correct 
principles  of  revenue  reform  or  with  the  previously  expressed 
sentiments  of  some  of  its  authors.  The  cultured  Chair- 
man of  the  Ways  and  Means  Committee  [Mr.  Wilson]  in 
his  article  published  in  the  North  American  Review  of 
January  last,  criticising  the  McKinley  bill,  said  as  follows: 

Raw  sugars  were  our  chief  revenue-producing  articles  on 
the  customs  list,  and  so  it  (the  McKinley  law)  wiped  out 


DAVID  B.  HILL'S  GREAT  SPEECH. 


49 


the  duties  upon  them  with  the  pletuous  cry  of  “ a free 
breakfast-table  for  the  working-men."  Both  these  two 
{tobacco  and  sugar)  were , in  a just  and  proper  sense , rev- 
enue taxes . The  tobacco  tax  should  not  have  been 
touched,  because  it  went  directly  into  the  Treasury  from 
the  pocket  of  the  taxpayer,  and  was  burdensome  upon  no 
one.  The  sugar  tax  might  very  properly  have  been  re- 
duced, but  should  not  have  entirely  abolished , because  of 
all  the  items  in  the  tariff  it  carried  the  largest  proportional 
amount  of  what  the  people  paid  into  the  Treasury. 

Yet  the  House  bill,  which  bears  Mr.  Wilson's  honored 
name,  actually  followed  the  McKinley  bill  in  rejecting  a 
duty  upon  raw  sugars. 

In  that  same  article  Mr.  Wilson  mildly  advocated  a cor- 
porate income  tax,  but  did  not  favor  an  individual  income 
tax.  In  speaking  of  the  latter,  he  admitted  that  it  would 
be  “ universally  evaded  " and  “ easily  lend  itself  to  fraud, 
concealment,  and  perjury,"  and  its  administration  would 
be  “ necessarily  accompanied  by  some  exasperating  and 
some  demoralizing  incidents."  He  favored  a corporate  in- 
come tax  because  “ such  a tax  ivould  not  be  a tax  upon 
individual  thrift , energy , or  enterprise , but  in  the  main 
upon  the  earnings  of  invested  capital." 

Mr.  Wilson,  in  his  eloquent  speech  in  the  House  on  Feb- 
ruary 1 last,  admitted  that  he  “ had  some  doubt  as  to  the 
expediency  of  a personal  income  tax  at  this  time,"  and 
expressly  stated  that  he  “ did  not  concur  in  the  policy  of 
attaching  an  income  tax  to  the  Tariff  bill." 

Yet  in  spite  of  his  own  personal  judgment,  and  evidently 
sincere  protestations,  an  individual  income  tax — which 
taxed  not  only  “invested  capital"  but  also  “individual 
thrift,  energy,  and  enterprise" — was  actually  attached  to 
this  Tariff  bill,  and  Mr.  Wilson  was  persuaded  to  support 
it. 

NO  CLASS  SHOULD  PAY  ALL  THE  TAXES. 

] have  no  patience  with  the  demagogic  clamor  which  is 
constantly  demanding  that  the  rich  shall  pay  all  the  taxes. 


50 


DAVID  I).  HILL  V GREAT  SPEECH*. 

Those  who  thoughtlessly  repeat  this  cry  need  to  be  re- 
minded that  this  Government  is  not  a plutocracy,  but  a 
Republic.  Here  manhood  suffrage  almost  universally  pre- 
vails, and  property  qualifications  for  political  positions  of 
honor  and  trust  are  nearly  everywhere  prohibited.  The 
highest  positions  in  the  land  are  open  to  the  aspirations  of 
the  poorest  and  most  obscure  youth  anywhere  to  be  found. 

It  is  fitting  that  it  should  be  so.  But  the  poor  man  who 
owns  no  real  estate  or  personal  property  pays  nothing  di- 
rectly toward  State,  county,  or  municipal  taxation — noth- 
ing toward  the  free  schools  which  his  children  attend, 
nothing  toward  the  maintenance  of  the  highways  over 
which  he  travels,  nothing  toward  the  expenses  of  the 
courts  where  his  rights  are  vindicated,  and  his  wrongs  re- 
dressed, nothing  for  lighted  streets,  police  protection,  pub- 
lic hospitals,  jails,  or  almshouses,  and  nothing  for  the 
church  at  which  he  worships,  because  here  we  have  no 
established  religion;  and  if  it  were  not  for  Custom  House 
taxation — taxation  upon  consumption — he  would  pay  not 
a farthing  toward  the  support  of  the  Government  which 
protects  him,  and  under  which  he  enjoys  the  blessings  and 
privileges  of  a free  and  independent  citizen. 

It  is  through  this  much-abused  system^  of  tariff  taxa- 
tion— much  abused  by  its  enemies,  and  misused  or  carried 
to  extremes  sometimes  by  its  friends— that  we  are  enabled 
to  equalize  somewhat  the  burdens  of  government.  It  may 
be  safely  asserted  as  an  equitable  principle,  involving  no 
hardship  to  any  one,  that  citizens  without  ownership  of 
real  estate  or  taxable  personal  property,  constituting  the 
most  numerous  class  in  every  community,  and  who  pay  no 
State  or  local  taxes,  ought  to  contribute  something  toward 
the  expenses  of  the  General  Government  under  which  they 
live;  and  to  enforce  the  performance  of  such  patriotic 
obligation  the  system  of  indirect  taxation  based  on  duties 
upon  foreign  imports  affords  the  least  offensive  method. 

If  the  contention  that  the  rich  should  pay  all  the  taxes* 


DAVID  B.  HILl/S  GREAT  SPEECH. 


51 


and  the  poor  be  exempt  thereform  is  well  founded,  then  it 
may  well  be  urged  that  the  rich  should  monopolize  the 
suffrages  and  offices  of  the  country. 

The  very  fact  that  every  citizen  is  obliged  to  contribute 
something,  no  matter  how  little,  toward  the  expenses  of 
government  whether  he  owns  property  or  not,  fortifies  his 
right  to  the  elective  franchise  and  augments  his  claim  for 
political  preferment.  He  should  regard  it  as  a privilege 
conferred  upon  him,  a shield  against  political  ostracism; 
it  increases  his  dignity  and  influence,  and  he  naturally 
takes  a keener  interest  in  public  affairs.  The  true  welfare 
of  the  community  is  subserved  by  this  system  of  indirect 
taxation,  which  reaches  all  but  oppresses  none. 

I am  opposed  to  any  income  tax  which  wholly  or  in  part 
proposes  to  supersede  this  wise  and  useful  method  of  taxa- 
tion. 

In  the  year  1875-76  a commission  of  most  distinguished 
and  reputable  gentlemen,  appointed  by  the  Governor  of 
New  York,  reported  to  the  Legislature  of  that  State  in 
favor  of  a scheme  of  municipal  government,  whereby  only 
those  who  owned  property,  and  paid  local  taxes  should  be 
entitled  to  vote  for  the  municipal  officers  vested  with  the 
control  or  disbursement  of  public  funds. 

It  was  plausibly  argued  that  citizens  who  contribute 
nothing  to  the  support  of  the  municipality  ought  not  in 
common  fairness  to  be  permitted  to  control  its  improve- 
ments, to  authorize  its  public  .works,  or  to  spend  its 
revenues,  while  the  class  who  pay  all  the  municipal  taxes, 
if  in  the  minority,  are  compelled  to  acquiesce  The  argu- 
ment, if  carried  out  to  its  legitimate  conclusion,  would 
favor  a plutocratic,  rather  than  a democratic,  form  of  gov- 
ernment, and  additional  weight  would  attach  to  it  if  citi- 
zens who  pay  no  local  taxes  should  also  be  exempt  from  all 
Federal  taxation. 

It  is  a significant  fact  that  the  Constitution,  which  re- 
quires no  property  qualifications,  and  recognizes  manhood 


52  DAVID  B.  HTLI/S  GREAT  SPEECH. 

suffrage,  should  at  the  same  time  provide  for  tariff  taxa- 
tion as  a source  of  revenue  which  is  set  apart  exclusively  as 
the  property  or  function  of  the  General  Government,  and 
conveying  the  idea  that  such  suffrage  and  indirect  tariff 
taxation  were  intended  to  be  inseparable — one  to  mitigate 
or  to  justify  the  other. 

THE  POPULATION  VERSUS  THE  TAXPAYERS. 

The  Comptroller  of  the  City  of  New  York  semi-officially 
informs  me  that  the  number  of  individual  taxpayers  in  the 
city  of  New  York  is  about  109,000.  Yet  that  city  has  a 
population  of  1,801,739  according  to  the  State  census  of 
1892,  and  of  1,515,301  according  to  the  Federal  census  of 
1890. 

The  disproportion  between  taxpayers  and  population 
may  not  be  so  large  in  some  other  cities,  but  it  is  believed 
that  in  almost  every  city  and  section  of  the  country  the 
population  is  ten  times  greater  than  the  number  of  indi- 
vidual taxpayers.  The  fact  that  nine  tenths  of  our  popula- 
tion pay  nothing  directly  toward  State,  county,  and  local 
taxation  adds  force  to  the  argument  that  they  should  con- 
tinue to  be  reached  indirectly  through  tariff  legislation. 

NO  NEED  OF  AN  INCOME  TAX. 

The  next  point  which  I desire  to  submit  is  that  the 
necessities  of  the  Treasury  do  not  require  an  income  tax. 
This  proposition  can  be  easily  and  clearly  demonstrated. 

The  Secretary  of  the  Treasury  in  his  annual  report  esti- 
mates that  the  amount  needed  for  the  support  of  the  Gov- 
ernment for  the  next  fiscal  year  will  be  $443,306,789.93. 
lie  also  estimates  that  upon  the  basis  of  existing  laivs  the 
revenues  for  the  same  period  will  be  as  follows: 


From  customs $190,000,000  00 

From  internal  revenue 160,000,000  00 

From  miscellaneous  sources 20,000,000  00 

For  postal  service 84,427,744  44 


Total  estimated  revenues $454,427,748  44 


DAVID  B.  HILl/s  GKEAT  SPEECH.  53 

Permit  me  to  observe  at  the  outset  that  this  (Wilson) 
bill  as  it  passed  the  House  discarded  existing  tariff  revenue 
to  the  amount  of  $73,680,448.80,  as  accurately  figured  by 
Treasury  experts.  Senator  Voorhees  in  his  speech  states 
the  amount  to  be  $76,670,000,  and  for  the  purposes  of  this 
discussion  we  will  assume  the  latter  amount  to  be  correct. 
This  large  reduction  created  a deficiency  in  the  amount 
absolutely  necessary  to  be  realized  for  the  support  of  the 
Government.  The  Ways  and  Means  Committee  recog- 
nized that  fact,  and  in  their  report  to  the  House  accom- 
panying the  tariff  portion  of  this  bill,  declared  that  they 
intended  thereafter  to  provide  “ internal-revenue  taxation, 
which  will  make  up  any  deficit  of  public  revenue/5  (See 
their  report  of  Bee.  19,  1893). 

Thereafter,  and  before  the  bill  passed  the  House,  the  in- 
come tax  ($30,000,000)  and  an  additional  tax  on  spirits 
($10,000,000)  were  added;  but  even  this  increase  left  a 
large  deficiency,  according  to  then  official  estimates. 

Yet  many  overzealous  friends  and  impatient  newspapers 
demanded  that  the  Senate  should  immediately  pass  this 
bill — with  its  conceded  defects — exactly  as  it  came  from 
the  House,  regardless  of  the  embarrassment  to  the  Gov- 
ernment which  it  might  hereafter  create. 

With  them  a surplus  or  deficiency  was  an  entirely  im- 
material consideration. 

The  Senate  Finance  Committee,  realizing  the  in- 
sufficiency or  inadequacy  of  this  bill,  proceeded  to  amend 
it  by  making  provision  for  additional  revenue.  The 
able  Chairman  of  that  committee,  in  his  recent  speech, 
said: 

The  criticisms  which  assailed  the  bill  as  it  came  from 
the  House  because  it  created  a deficiency  in  the  Treasury, 
no  longer  apply.  We  present  a measure  full  freighted 
with  revenue  for  every  call  that  can  be  made  on  the  Re- 
public at  home  and  abroad,  and  with  a surplus  besides  of 
$29,389,245. 


54 


DAVID  B.  HILL'S  GREAT  SPEECH. 


According  to  this  statement,  the  bill  has  cc  jumped  out 
of  the  frying-pan  into  the  fire."  From  a deficiency  there 
has  arisen  an  immoderate  surplus.  One  extreme  has  been 
succeeded  by  another.  The  committee  made  many 
changes,  taking  sugar,  iron,  coal,  lead,  and  other  articles 
from  the  free  list  and  making  them  dutiable,  and  pro- 
viding for  a tax  upon  sugar  estimated  by  official  experts  to 
realize  $41,822,623.61,  and  an  additional  tax  on  spirits 
from  which  $10,000,000  is  anticipated.  Yet,  notwith- 
standing these  large  additions  of  revenue  sources  to  the 
bill,  the  committee  still  retained  the  income  tax. 

Let  us  see  how  the  figures  now  stand.  Secretary  Car- 
lisle's estimate  in  his  annual  report  was  as  follows: 

Expenditures. 


Civil  and  miscellaneous $86,795,460  92 

War 47,173,203  05 

Navy 27,875,914  02 

Indians 6,931,156  61 

Pensions 162,631,570  00 

Interest 26, 500, 000  00. 

Postal  service,  Ac 90,399,485  33 


Total $448,306,789  93 


Here  are  the  revenues  expected  to  be  realized  under  this 
bill: 

Receipts. 

Internal  revenue  (under  existing  laws). $160,000,000  00 

Postal  (under  existing  laws) 84,427,766  00 

Miscellaneous  (under  existing  laws). . . . 20,000,000  00 

Customs  under  pending  bill,  as  estimat- 
ed by  Treasury  experts,  including 

$41,822,631.61  for  sugar  duties 163,361,000  00 

Additional  internal  revenue  to  pending 
bill,  as  follows: 

Income  tax 30,000,000  00 

Spirits 20,000,000  00 

Cards. ...... 3,000,000  00 

Total $480,788,766  00 

Summary  Statement. 

Receipts $480,788,766  00 

Expenditures 448,306,789  00 

Balance $32,481,977  00 


David  b.  hill's  obeat  speech. 


55 


These  figures  thus  show  an  excess  of  revenue  over  ex- 
penditures of  $32,481,977,  being  $3,092,732  larger  sur- 
plus than  admitted  in  Senator  Voorhees’s  official  state- 
ment. 

They  establish  the  fact  that  the  proposed  income  tax, 
estimated  at  $30,000,000,  is  not  required  for  any  legiti- 
mate purposes  of  the  Government. 

An  amendment  to  the  bill  striking  out  that  tax  would 
still  leave  a surplus  of  $2,481,977. 

Besides,  it  is  now  apparent  that  the  estimate  of  $162,- 
631,570  for  pensions  contained  in  Mr.  Carlisle’s  report  was 
inaccurate,  and  may  be  safely  reduced  to  $140,000,000  or 
$145,000,000.  Senator  Yoorhees’s  speech  virtually  con- 
cedes as  much,  and  his  own  statement  of  the  sum  reduces 
the  amount  required  to  $145,000,000  (see  Congressional 
Record , volume  26,  No.  92,  page  4,T57),  being  $17,631,- 
570  less  than  previous  estimates,  which  sum  added  to  the 
$32,481,977  surplus  before  mentioned  makes  a total  sur- 
plus of  $50,113,547  under  this  bill  as  amended  by  the 
Finance  Committee. 

Upon  reflection,  it  may  be  confidently  asserted  that  the 
pension  expenditures  for  the  next  fiscal  year  will  not  ex- 
ceed $140,000,000,  as  there  has  been  a steady  decrease  of 
late  under  the  present  vigilant  administration  of  our  pen- 
sion laws.  The  expenditures  for  the  first  nine  months  of 
the  present  year  have  been  only  $107,151,496,  and  at  that 
rate  for  the  remaining  three  months  the  amount  for  the 
whole  year  will  be  only  $142,858,661.  A conservative 
estimate,  therefore,  would  deduct  the  further  sum  of 
$5,000,000  (over  and  above  the  $17,631,570  previously  de- 
ducted) from  the  amount  originally  announced,  which 
should  be  added  to  the  surplus  already  assured  ($50,113,- 
547),  making  a grand  total  of  $55,113,547.  Mr.  Edward 
Atkinson  estimates  that  the  amount  required  for  pensions 
for  1894-95  will  not  exceed  $135,000,000. 

The  situation,  then,  may  be  summarized  as  follows ; 


56 


DAVID  B.  HILL’S  GREAT  SPEECH. 


Receipts  under  Senate  bill .$480,788,766 

Expenditures  for  fiscal  year  1895 425,675,219 

Total  surplus - $55,118,547 

Deduct  income  tax 30,000,000 

Surplus  without  income  tax $22,113,547 


If  Mr.  Atkinson  is  correct,  then  $5,000,000  more  may 
be  added  to  this  surplus. 

Two  points  should  not  be  overlooked  bearing  upon  the 
questions  of  increased  revenues:  First,  that  under  these 
figures,  no  allowance  has  been  made  for  the  possibility  of 
increased  importations  under  the  reduced  duties:  Second, 
no  allowance  has  been  made  for  the  probability  of  such  in- 
crease under  anticipated  revived  conditions  of  trade. 
Neither  of  these  important  considerations  can  well  be 
ignored. 

The  estimates  of  importations  anticipated  under  this  bill 
are  based  upon  the  actual  importations  during  the  last 
complete  fiscal  year  ending  June  30,  1893.  The  extreme 
duties  imposed  under  the  existing  McKinley  law  during 
that  year  are  alleged  to  have  largely  prevented  importa- 
tions which  would  otherwise  have  been  received,  or  at  least 
been  possible  under  lower  duties.  Of  course,  enormous 
duties — oftentimes  styled  prohibitory  duties — tend  to  pre- 
vent importations,  while  experience  has  shown  that  fre- 
quently the  imposition  of  lower  duties  has  increased  the 
revenues  by  materially  increasing  the  importations. 

Commercial  depression  naturally  diminishes  importa- 
tions, as  it  blocks  the  wheels  of  trade,  and  invites  econo- 
mies of  every  character.  The  latter  half  of  the  fiscal  year 
1892-93  was  largely  affected  by  the  monetary  panic,  and  it 
is  not  unreasonable  to  believe  that  the  business  disturbances 
incident  thereto  may  have  materially  diminished  the  im- 
portations from  what  they  otherwise  would  likely  have 
been. 

No  official  nor  semi-official  estimates  have  been  furnished 
us — nor  have  I undertaken  to  make  any  figures  at  this 


DAVID  B.  HILL'S  GREAT  SPEECH.  57 

time — of  the  increased  revenues  which  may  reasonably  be 
anticipated  under  this  bilb  as  now  amended,  on  account  of 
the  two  considerations  which  I have  mentioned.  It  is 
sufficient,  however,  to  declare  that  large  increases  of 
revenue  are  probable,  which  will  swell  the  surplus  to  huge 
proportions  if  the  income  tax  or  the  sugar  tax  shall  still  be 
retained.  Neither  have  I ventured  to  consider  the  econo- 
mies and  reforms  which  are  likely  to  be  instituted  in  the 
various  departments  of  the  Government  and  which  are 
always  probable  under  a Democratic  Administration,  from 
which  large  reductions  in  expenditures  may  be  expected. 

Mr.  President,  these  figures  which  I have  submitted 
speak  for  themselves.  They  demonstrate  that  the  only 
plausible  ground  upon  which  the  income  tax  was  first 
sought  to  be  imposed,  to  wit,  that  it  was  actually  needed 
to  meet  the  necessities  of  the  Government,  has  been 
thoroughly  exploded. 

This  is  not  my  individual  conclusion  alone.  The 
country  so  regards  it. 

Mr.  Edward  Atkinson,  of  Massachusetts,  a distinguished 
political  economist,  in  a recent  article  to  the  Boston  Her- 
ald, in  speaking  of  the  Senate  amendments  to  this  bill  says: 

The  pretext  that  an  income  tax  may  be  needed  to  cover 
a deficiency  that  would  otherwise  occur,  therefore  falls  to 
the  ground. 

Concerning  this  tax  he  then  adds, 

that,  economically  considered,  I deem  it  a war  tax  of  last 
resort  when  all  the  other  sources  have  failed. 

Ifdn  the  face  of  these  facts — if  in  the  light  of  these 
figures — if  in  spite  of  the  honest  and  sincere  opposition 
which  this  tax  naturally  engenders  from  the  people  of  that 
great  section  of  the  country  which  I have  the  honor  in 
part  to  represent  on  this  floor — a people  as  patriotic,  as 
loyal,  as  generous,  and  as  philanthropic  as  those  of  any 
other  section,,  I repeat,  if  notwithstanding  these  things 


58  DAVID  B.  HILL'S  GREAT  SPEECH. 

which  ought  surely  in  common  fairness  to  lead  to  the 
elimination  of  this  obnoxious  feature  of  this  bill,  its  reten- 
tion shall  still  be  insisted  upon  by  the  unwise,  and  mis- 
guided, and  assumed  champions  of  tariff  reform  in  this 
Congress,  and  defeat  shall  await  the  whole  bill,  let  the 
Responsibility  fall  upon  the  heads  of  those  where  it  prop- 
erly belongs. 

A DEFENSE  OF  HEW  YOKE'S  BUSINESS  MEH. 

I listened  the  other  day  with  considerable  interest  to 
the  distinguished  Senator  from  Indiana  in  his  fierce  de- 
nunciations of  the  people  in  this  country  who  have  been 
fortunate  enough  to  accumulate  a competence.  He 
nearly  exhausted  the  vocabulary  of  abuse  in  the  anathemas 
which  he  hurled  against  them. 

He  rebuked  their  “ narrow  and  corroding  selfishness;" 
their  “dangerous  pretensions  and  intolerable  arrogance;" 
he  described  their  “ brutal  dictation;"  he  upbraided 
“their  unjust,  relentless,  unsparing,  and  insolent"  con- 
duct; he  pictured  their  wealth  as  the  “ illegitimate  off- 
spring of  governmental  paternalism,"  and  characterized 
them  as  without  “gratitude,  or  love  of  country;"  he  im- 
puted to  them  an  intention  and  willingness  to  commit  per- 
jury and  other  crimes  “ for  which  the  convict  stripes  of 
the  penitentiary  are  the  only  punishment,"  and  then,  hav- 
ing summarily  adjudged  them  guilty  without  court  or 
jury,  he  declares  them  to  be  “ fit  associates  for  thieves, 
house-breakers,  forgers,  and  cut-throats,"  and  not  satisfied 
with  this  terrible  humiliation  which  he  inflicted  upon  them, 
and  notwithstanding  his  well-known  amiable  and  forgiving 
disposition,  with  one  fell  swoop  he  consigned  them  all  “ to 
everlasting  hell." 

Then,  Mr.  President,  he  calmly  and  seriously  said  to  us: 
“I  am  loath  to  say  these  things."  He  need  not  have 
given  us  that  assurance;  of  course,  we  all  keenly  realized 
it.  We  knew  with  what  reluctance  he  assumed  his  un- 


DAVID  B.  HILl/S  GREAT  SPEECH. 


59 


pleasant  task,  and  with  what  lack  of  eagerness  he  embraced 
the  afforded  opportunity.  Mr.  President,  these  violent 
and  unseemly  denunciations — these  arguments,  if  they  can 
be  dignified  as  such — may  answer  for  the  hustings  of  In- 
diana, but  I regret  to  hear  them  in  the  Senate  of  the 
United  States. 

Notwithstanding  this  terrible  arraignment  of  the  men  of 
wealth,  to  which  I have  briefly  alluded,  I venture  to  speak 
a few  words  in  their  defense.  I speak  more  especially  of 
the  men  of  means  of  my  own  State.  I can  not,  of 
course,  speak  for  those  of  Indiana — they  may  be  all  that 
they  are  painted  by  the  senior  Senator  from  that  State. 
While,  however,  I doubt  that  fact,  I have  such  respect  for 
him  and  his  statements  that  I can  not  safely  contradict 
him.  The  men  of  wealth  of  New  York,  as  a general  rule, 
are  among  our  best,  most  esteemed,  and  reputable  citizens. 
They  are  not  the  vile  rascals  they  have  been  depicted,  and 
their  riches  have  not  been  acquired  by  questionable  mean^, 
governmental  favors,  usury,  nor  extortion. 

Some  inherited  their  wealth  from  honorable  ancestors, 
others  obtained  it  by  fortunate  investments,  others  by 
great  business  ability,  tremendous  industry,  and  remark- 
able sagacity.  They  have  largely  contributed  to  the  great- 
ness and  glory  of  the  State,  building  up  its  industries, 
augmenting  its  commercial  supremacy,  sustaining  its 
finances,  and  assisting  its  great  and  varied  undertakings. 

The  strong  and  solid  financial  institutions  which  they 
control,  the  great  life  and  fire  insurance  companies  which 
they  manage,  the  admirable  loan  and  trust  associations 
which  they  direct,  the  magnificent  lines  of  railroads  which 
they  operate,  not  only  in  New  York,  but  elsewhere,  the 
splendid  manufactories  which  they  conduct,  wherein  tens 
of  thousands  of  working-men  and  women  are  employed  in 
honest  labor,  the  immense  shipping  interest  which  they 
represent,  the  tremendous  wholesale  and  retail  establish- 
ments of  trade  which  they  maintain,  and  the  hundreds  of 


60 


DAVID  B.  HILL  S GREAT  SPEECH. 


other  business  enterprises  of  vast  magnitude  which  they 
honorably  and  successfully  manage,  are  the  evidences  of 
their  ability,  their  genius,  their  prudence,  and  their  in- 
tegrity. 

The  institutions  of  learning  which  they  have  founded,  of 
which  Cornell  University,  Vassar  College,  Cooper  Insti- 
tute, Vanderbilt  University  are  conspicuous  instances;  the 
public  libraries  which  they  have  endowed,  of  which  the 
Astor  Library,  the  Lenox  Library,  the  Tilden  Library  are 
notable  examples;  the  free  hospitals  which  they  have  in- 
stituted, of  which  the  Roosevelt  Hospital,  the  Arnot- 
Ogden  Hospital,  and  scores  of  others  throughout  my  State 
which  do  not  now  occur  to  me — all  these  benefactions 
attest  their  widespread  and  noble  generosity,  and  disprove 
the  contemptible  charge  of  their  supreme  “ selfishness.” 

Whenever  famine,  pestilence,  or  fire  has  afflicted  their 
countrymen  in  any  locality  or  section  of  the  Union,  ‘the 
wealthy  business  men  of  New  York  always  speedily  came 
to  the  rescue  and  liberally  responded. 

In  great  political  campaigns,  when  the  life  of  political 
parties  has  been  deemed  to  be  at  stake,  even  Indiana  and 
some  portions  of  the  South  have  not  refused  assistance 
from  the  wealthy  partisans  of  New  York. 

When  the  nation's  credit  is  in  peril,  and  funds  are  need- 
ed to  meet  the  daily  wants  of  its  Treasury,  and  it  must 
borrow  from  its  citizens,  where  else  except  to  the  bank- 
ers of  New  York  dues  your  Secretary  of  the  Treasury  with 
confidence  apply? 

When  the  country's  very  life  was  in  danger,  when  the 
fate  of  the  Government  hung  trembling  in  the  balance, 
when  money  was  sorely  needed  to  defend  the  Union, 
what  subscribers  to  the  nation's  securities  more  quickly 
and  cheerfully  responded  in  the  hour  of  emergency  than 
the  moneyed  men  of  my  State? 

Mr.  President,  I need  say  no  more.  This  speaking  in 
defense  of  wealth  is  a new  role  to  me.  The  record  of  my 
official  life  shows  that  my  public  utterances  as  well  as 
services  have  usually  been  in  other  directions — in  defense 
of  the  poor,  in  vindication  of  the  oppressed,  and  for  the 
amelioration  of  labor.  I have  no  entangling  alliances  nor 
particular  sympathies  with  those  at  whom  this  income  tax 
is  principally  aimed;  they  have  never  been  any  especial 
friends  of  mine.  But-  I trust  that  I am  fair-minded  and 


DAVID  B.  HILl/S  GREAT  SPEECH.  61 

broad-minded  enough  to  defend  any  class  of  my  fellow- 
citizens — rich  or  poor,  high  or  low,  white  or  black,  native 
or  naturalized — whose  fair  fame  is  unjustly  assailed,  or 
whose  rights  are  threatened,  and  whose  interests  are  en- 
dangered by  what  I believe  to  be  hostile  and  vicious  legis- 
lation. 

I have  yet  to  learn  that  poverty  is  a cardinal  virtue,  and 
that  wealth  is  an  abominable  crime.  All  classes  have 
their  rights,  and  one  class  must  not  be  permitted  to  en- 
croach upon  the  other.  The  demagogue  who  seeks  to  stir 
up  class  prejudices  and  class  resentments  in  order  to  win 
the  gratitude  or  the  applause  of  the  mischievous  and  the 
unthinking  who  are  essentially  his  dupes,  deserves  only 
execrations  at  the  hands  of  all  right-minded  men. 

THE  TILDEH  IHCOME-TAX  CASE. 

A moment  since  I mentioned  the  Tilaen  Library.  This 
reminds  me  of  the  fact  that  the  distinguished  citizen  and 
Democrat — whose  memory  we  all  revere — Samuel  J. 
Tilden,  one  of  the  wealthy  men  of  New  York  who  gen- 
erously donated  his  millions  to  the  establishment  of  a 
great  free  public  library — a portion  of  which- fund,  how- 
ever, it  was  deprived  of  through  the  technicalities  of  the 
law — was  himself  the  victim  of  the  injustice,  the  oppres- 
sion, and  the  persecution  permissible  under  an  income  tax. 

We  have  not  forgotten  the  annoyances  to  which  this 
venerable  apostle  of  Democracy  was  subjected,  the  oppro- 
brium which  he  endured,  the  bitter  litigations  and  prosecu- 
tions which  he  encountered  at  the  hands  of  a few  un- 
scrupulous political  opponents  vested  with  a little  brief 
authority,  in  their  pretended  enforcement  of  the  law, 
endangering  his  feeble  health  and  imbittering  his  old  age. 

It  was  not  enough  that  he  had  been  deprived  of  the 
Presidency,  to  which  a majority  of  a quarter  of  a million 
of  the  popular  vote  had  desired  to  elevate  him — deprived 
because  of  the  crimes  of  fraudulent  and  purchased  return- 
ing boards  in  three  States — but  he  must  be  branded  and 
denounced  as  a wealthy  and  selfish  politician  seeking  to 
fraudulently  evade  the  payment  of  his  just  share  of  gov- 
ernmental taxation. 

And  now,  within  less  than  ten  years  after  his  lamented 
death,  we  are  told  by  these  new  apostles  of  Democracy 
that  this  Populist  rider  to  a revenue  tariff  bill,  with  all 


62 


DAVID  B.  HILL'S  GREAT  SPEECH. 


the  enormities  and  inquisitorial  features  which  pertain  to 
it,  is  the  very  quintessence  of  modern  Democracy,  and 
without  which  all  else  is  valueless. 

THE  TRUE  ENEMIES  OF  TARIFF  REFORM. 

The  enemies  of  tariff  reform  are  those  who  imperil  the 
passage  of  this  bill  by  arbitrarily  insisting  upon  the  reten- 
tion of  an  income  tax  therein.  They  refuse  to  present  a 
separate  measure  embracing  this  feature.  They  even  de- 
cline to  fix  any  date — one,  two,  or  three  years — when  the 
income  tax  shall  cease,  but  they  seek  to  incorporate  and 
establish  it  as  a permanent  policy  of  the  government. 

They  shut  their  eyes  to  the  fact  that  a Believer  in  tariff 
reform  is  not  necessarily  a believer  in  an  income  tax.  A 
tariff  tax  is  altogether  a different  matter  from  an  income 
tax.  They  are  neither  identical,  homogeneous,  nor  con- 
sistent with  each  other.  Tariff  reform  means  tariff  re- 
duction— not  tariff  extinction,  nor  direct,  nor  internal 
taxation.  These  widely  divergent  methods  should  not  be 
confused  nor  conglomerated.  The  first  notable  effort  for 
tariff  reform  since  the  war  was  embodied  in  the  Morrison 
bill;  but  there  was  no  suggestion  of  an  income  tax. 

Then  came  the  famous  tariff  message  of  President 
Cleveland,  which  simply  invited  a reduction  of  tariff  duties 
to  prevent  a further  surplus,  but  there  was  no  recom- 
mendation for  the  restoration  of  war  taxes,  to  wit,  taxes 
upon  incomes.  Then  followed  the  Mills  bill,  which  passed 
a Democratic  House  of  Representatives,  and  was  distinctly 
approved  by  the  National  Democratic  Convention  of  1888, 
but  nothing  was  heard  of  any  income  tax.  But  now,  at 
this  late  day,  after  a third  party  has  adopted  it  as  its 
shibboleth,  we  are  told  that  it  is  the  sine  qua  non  of  tariff 
reform  and  true  Democracy.  I deny  the  right  of  any 
man,  without  the  sanction  of  a national  convention,  to  add 
this  new  tenet  to  the  Democratic  faith. 

OUR  DUTY. 

Mr.  President,  I do  not  need  to  be  reminded  that  it  is 
the  duty  of  the  present  Congress  to  revise  the  tariff.  I 
appreciate  that  fact  as  keenly  as  any  Senator  here.  We 
are  pledged  to  that  course;  the  country  expects  it.  We 
are  pledged  to  a tariff  for  revenue;  we  are  not  pledged  to 
pass  an  income  tax.  We  are  pledged  to  pass  a tariff 


DAYID  B.  HILL^S  GREAT  SPEECH.  63 

measure  which  will  produce  sufficient  revenue  for  the  sup- 
port of  the  Government,  not  one  insufficient  for  that  pur- 
pose. 

We  have  no  moral  right  to  deliberately  discard  seventy- 
six  millions  of  tariff  revenue,  and  thereby  create  a de- 
ficiency to  be  supplied  by  other  and  more  objectionable 
taxation.  That  is  not  reform;  it  is  folly,  it  is  impotency, 
it  is  scarcely  less  than  criminal  under  the  existing  con- 
ditions of  the  country.  It  is  experimenting  with  and 
hazarding  all  our  vast  and  varied  business  interests  now 
demanding  our  watchful  care. 

MY  POSITION  BRIEFLY  STATED. 

I stand  ready  to  support  any  reasonable  measure  for 
tariff  reform  framed  within  the  lines,  and  based  upon  the 
principles  which  I have  here  partially  indicated,  and 
which  were  fully  set  forth  in  my  speech  in  opening  the 
political  campaign  in  Brooklyn  on  September  19,  1892. 
I stand  to-day  where  I stood  then.  I have  nothing  to  add, 
and  nothing  to  retract. 

I will  cheerfully  vote  for  the  Mills  bill,  and  join  with 
you  in  making  many  material  reductions  of  duties  therein. 
I am  ready  to  waive  all  minor  differences  of  details  which 
do  not  involve  a question  of  principle. 

Having  spoken  to-day  especially  upon  the  income  tax 
feature  of  this  bill,  I reserve  the  expression  of  my  views 
upon  its  other  features  until  near  the  close  of  the  discus- 
sion. 

COHCLUSIOH. 

Mr.  President,  this  is  a important  crisis  in  the  history  of 
the  Democratic  party.  The  failure  of  tariff  revision  at 
this  time  means  the  defeat,  the  demoralization,  if  not  the 
division  and  annihilation  of  our  party.  Moreover,  it 
means,  as  we  believe,  injury  to  the  best  interests  of  the 
country.  Let  those  who  insist  upon  injecting  into  this  bill 
this  odious  and  un-Democratic  feature  of  an  income  tax — 
a relic  of  war  legislation — pause  and  reflect  upon  the  pos- 
sible consequences  of  their  unwarrantable  demands. 

They  should  realize  that  it  means  the  loss  of  the  control 
of  this  Senate,  now  nearly  equally  divided  between  the  two 
great  parties;  it  means  the  loss  of  the  next  House  of 
Representatives;  it  means  the  loss  of  the  electoral  votes  of 


New  York,  New  Jersey,  Connecticut,  and  probably  ever 
Northern  State;  and  finally,  it  means  the  loss  of  the  nex 
Presidency,  and  all  that  it  implies.  They  should  recollec 
that  this  income  tax  feature  is  justly  regarded  in  Ne\ 
York  and  many  other  Northern  States  as  a scheme  o 
spoliation,  an  unwarranted  sectional  attack  upon  thei 
citizens  of  means.  — 

They  should  consider  whether  there  is  anything  about 
an  income  tax  so  sacred,  so  desirable,  so  popular,  so  just, 
and  so  defensible  that  its  maintenance  is  worth  the  risk 
which  they  are  precipitating.  Let  them  remember  1860 
and  the  ultra  demands  then  made  upon  the  Democratic 
party,  to  which  it  could  not  honorably  accede;  demands 
which  led  to  our  division  and  defeat;  let  them  remember 
the  triumphs  of  our  opponents,  the  civil  war  that  followed, 
the  devastation,  the  suffering,  the  humiliation  which  en- 
sued, the  military  and  carpet-bag  governments  which 
flourished,  the  Force  bills  which  threatened,  and  all  the 
incidents  of  the  terrible  years  which  darkened  our  party’s 
and  our  country’s  history  from  1860  to  1884,  when, 
through  wiser . cpunsels,  moderate  action,  conciliatory 
methods,  and  restored  confidence,  we  were  intrusted  with 
power  again;  and,  reflecting  upon  all  these  things,  let 
them  say  whether  it  is  the  part  of  wisdom,  by  the  insistence 
upon  extreme  demands,  to  imperil  the  success  of  our 
party  again,  and  thereby  tend  to  retard  the  progress, 
diminish  the  glory,  and  endanger  the  best  and  highest 
interests  of  our  common  country. 


